Oilman Magazine September/October 2020 : simplebooklet.com

Oilman Magazine / September-October 2020 / OilmanMagazine.com1IN THIS ISSUEFeatureOne Hundred Years In The Permian: Rebecca Ponton .................................................................................................................................................................................52-55OILWOMAN – A New Aera For President and CEO Christina Sistrunk: Rebecca Ponton ..............................................................................................................108-112In Every IssueLetter from the Publisher ...........................................................................................................................................................................................................................................2OILMAN Contributors ..............................................................................................................................................................................................................................................2OILMAN Online // Retweets // Social Stream ....................................................................................................................................................................................................3Downhole Data ........................................................................................................................................................................................................................................................... 3OILMAN Columns Oilman Cartoon: Steve Burnett ...............................................................................................................................................................................................................................31Natural Gas: Beyond the Pandemic: Mark A. Stansberry....................................................................................................................................................................................43Improving Operations Through Technology: How Sigma Drilling Technologies is Revamping Industry Drilling Practices: Tonae’ Hamilton .................................64Interview: Spencer Albright, President, MineralWare: Eric R. Eissler ..............................................................................................................................................................66Low-Code Software Development to Propel Oil and Gas Tech Higher: Eric R. Eissler ..............................................................................................................................70Pipelines: A Vital Piece of the Puzzle in the Oil and Gas Stream: Emmanuel Sullivan .................................................................................................................................72Digital Twins Flourish in Upstream Sector: Eric R. Eissler ................................................................................................................................................................................84Wearable Safety Technology in Combustible Gas Detection: Sarah Skinner ...................................................................................................................................................88Living the Crude Life: Jason Spiess .......................................................................................................................................................................................................................102Guest Columns Estimating Installation Costs for Automatic Tank Gauges: Lee Aiken ..............................................................................................................................................................4AI’s Critical Role in The Digital Transformation Journey: Patrick O’Brien .......................................................................................................................................................6Amphibious, All-Terrain and Airborne Drones Enhance Efciency in Execution of Essential Services: Barry Alexander ...................................................................10API Foundation for Renery Safety Regulations: Andres Ocando ...................................................................................................................................................................14Buyer Beware: Consent-to-Assign Provisions in the Oil Patch: Christopher Hogan .....................................................................................................................................18Choosing the Right MWD Telemetry System Reduces Well Delivery Costs: Shadi Mussa ...........................................................................................................................20Considerations Before Implementing AI in the Oil and Gas Industry: Patrick O’Brien and Ian Campbell ...............................................................................................24Decarbonizing Oil and Gas Using AI: George Hackford ...................................................................................................................................................................................26Building Your Sustainable AI Strategy and Implementation: Ian Campbell ....................................................................................................................................................28Deepwater Manages Pandemic on Land and at Sea: Nick Vaccaro ...................................................................................................................................................................30Patented Chemical Mixing Tool Improves Results While Slashing Chemical Spending: Paul Tarmann .....................................................................................................34Using 3D Digital Twins to support Mergers and Acquisitions Due Diligence for Industrial Assets and Facilities: Brent Stanley .........................................................37Drilling Tools Most Used and Techniques to Exploit Formation Conditions: Raul Palencia .......................................................................................................................403D Printing Readiness: How to Get Setup for Success: Fabian Alefeld ...........................................................................................................................................................44Financial Reporting Impairment Considerations for Oil and Gas Companies in the Low-Price Environment: Matt Federle ...............................................................46Four Fundamentals to Improve Safe Production in Lean Times: Eric Michrowski and Josh Williams ......................................................................................................48Future Forward Operations: Putting Innovation at the Top of the Offshore Agenda: James Larnder ......................................................................................................50GTL Technology for Flare Mitigation is Critical to Tackling Scope 3 Emissions: Holly Havel ...................................................................................................................56How COVID-19 is Forcing Oil and Gas to Rethink Workforce Management: Richard Marshall ...............................................................................................................58Implementing the Right Strategies to Immediately Boost Operator Cash Flow: Kevin Decker and Steve Haglund ................................................................................60Leveraging Technology to Crush Costs and Concerns: Elizabeth Gerbel .......................................................................................................................................................68Satellite Connectivity is Key for Driving Offshore Efciency, Now More Than Ever: Simon Gatty Saunt ..............................................................................................74How Safety Has Become a Priority for the Oil Sector: Henry Berry ................................................................................................................................................................77Young Professionals in the Oil and Gas Industry: Interview with Kim Salinas, Bank Engineer, ING: Alan Alexeyev ...........................................................................80The Challenge of Hurricane Preparedness During a Global Pandemic: Jim MacDonnell, Matt Grossman and Clark Sackschewsky .................................................82Tax Considerations for Oil and Gas in a Low Price Environment: Rob Myatt ...............................................................................................................................................86Third-Party Compliance Management Trends in Midstream Operations: Louis Krannich and Whitney Vandiver ..................................................................................90AR is Driving Business Continuity, Flexibility and Resilience in the Oil and Gas Industry: Kelly Malone ................................................................................................93What are the Most Relevant New Technologies for the Upstream Sector? Andres Ocando ........................................................................................................................96Why AI Will be a Game Changer for the Global Oil and Gas Sector: Craig Hayman .................................................................................................................................100Lightning Strikes in the Permian: Christopher J. Riojas .....................................................................................................................................................................................101OILWOMAN – Greater Gender Diversity – A Rare Positive Change to Emerge From the COVID-19 Crisis? Kerrine Kafwembe Byran .................................... 114OILWOMAN – In the Hot Seat: Solar’s Abby Hopper: Rebecca Ponton .....................................................................................................................................................116OILWOMAN – Breast Cancer Awareness Special – Thinking Outside the Bow: Denise Porretto .......................................................................................................... 119POWERING THE ENERGY VALUE CHAINUpstream to Midstream ERP in ONE PlatformW Energy Software (formerly Watereld Energy) offers the only unied oil & gas ERP software platform built on the cloud. With W Energy Software as a partner, upstream and midstream companies stay lean and agile with the modern technology they need to adapt to market changes.Discover the Future of Energy Software at WEnergySoftware.com

Page 4

Oilman Magazine / September-October 2020 / OilmanMagazine.com2Mark A. StansberryMark A. Stansberry, Chairman of The GTD Group, is an award-winning author, columnist, lm and music producer, radio talk show host and 2009 Western Oklahoma Hall of Fame inductee. Stansberry has written ve energy-related books. He has been active in the oil and gas industry for over 41 years having served as CEO/President of Moore-Stansberry, Inc., and The Oklahoma Royalty Company. He is currently serving as Chairman of the Board of Regents of the Regional University System of Oklahoma, Chairman Emeritus of the Gaylord-Pickens Museum/Oklahoma Hall of Fame Board of Directors, Lifetime Trustee of Oklahoma Christian University, and Board Emeritus of the Oklahoma Governor’s International Team. He has served on several private and public boards. He is currently Advisory Board Chairman of IngenuitE, Inc. and Advisor of Skyline Ink. Joshua RobbinsJosh Robbins is currently the Chief Executive Ofcer of Beachwood Marketing. He has consulted and provided solutions for several industries, however the majority of his consulting solutions have been in manufacturing, energy and oil and gas. Mr. Robbins has over 15 years of excellent project leadership in business development and is experienced in all aspects of oil and gas acquisitions and divestitures. He has extensive business relationships with a demonstrated ability to conduct executive level negotiations. He has developed sustainable solutions, successfully marketing oil and natural gas properties cost effectively and efciently.Jason SpiessJason Spiess is an award winning journalist, talk show host, publisher and executive producer. Spiess has worked in both the radio and print industry for over 20 years. All but three years of his professional experience, Spiess was involved in the overall operations of the business as a principal partner. Spiess is a North Dakota native, Fargo North Alumni and graduate of North Dakota State University. Spiess moved to the oil patch in 2012 living and operating a food truck in the parking lot of Macís Hardware. In addition, Spiess hosted a daily energy lifestyle radio show from the Rolling Stove food truck. The show was one-of-a-kind in the Bakken oil elds with diverse guest ranging from U.S. Senator Mike Enzi (WY) to the traveling roadside merchant selling ags to the local high school football coach talking about this week’s big game.Steve BurnettSteve Burnett has been working in the oil industry since the age of 16. He started out working construction on a pipeline crew and upon retirement, nished his career as a Pipeline Safety Compliance Inspector. He has a degree in art and watched oil and art collide in his career to form the “Crude Oil Calendars.” He also taught in the same two elds and believes that while technology has advanced, the valuable people at the core of the industry and the attributes they encompass, remain the same. With a humorist for a father, he also learned that a dose of comedy makes everything better. The major inuences on his cartooning style were the Ace Reid Cowpokes cartoons, the Dirk West sports cartoons and V.T. Hamlin’s Alley Oop comic.SEPTEMBER — OCTOBER 2020PUBLISHER Emmanuel SullivanEDITOR-IN-CHIEF Rebecca PontonMANAGING EDITOR Sarah SkinnerASSISTANT EDITOR Eric R. EisslerASSOCIATE EDITOR Tonae’ HamiltonGRAPHIC DESIGNER Kim FischerCONTRIBUTING EDITORS Steve Burnett Joshua Robbins Jason Spiess Mark StansberryADVERTISING SALES Eric Freer Diana GeorgeTo subscribe to Oilman Magazine, please visit our website, www.oilmanmagazine.com/subscribe. The contents of this publication are copyright 2020 by Oilman Magazine, LLC, with all rights restricted. Any reproduction or use of content without written consent of Oilman Magazine, LLC is strictly prohibited.All information in this publication is gathered from sources considered to be reliable, but the accuracy of the information cannot be guaranteed. Oilman Magazine reserves the right to edit all contributed articles. Editorial content does not necessarily reflect the opinions of the publisher. Any advice given in editorial content or advertisements should be considered information only.CHANGE OF ADDRESS Please send address change to Oilman Magazine P.O. Box 42511 Houston, TX 77242 (800) 562-2340Cover photo courtesy of Jasmin Pawlowicz – www.istockphoto.com Inside back cover courtesy of Dan Dunn www.paintjam.com – 416-931-3643LETTER FROM THE PUBLISHERCONTRIBUTORS — BiographiesEmmanuel Sullivan, Publisher, OILMAN MagazineWe’re all searching for the good news in the good news/bad news equation right now and it can be hard to nd at rst glance. While remaining realistic and pragmatic, at OILMAN we also want to be optimistic and, if we know one thing about the energy industry, it’s that the people who make up the industry know how to adapt, innovate and adjust to its cyclical nature (and even something as unforeseen as COVID-19). Case in point: as employees had to respond with agility to working remotely (and, for some, the added responsibility of homeschooling), thanks to digitization and advanced technologies, many companies had their employees connected virtually within a matter of days without interrupting business.Let’s get the bad news out of the way rst. Like many industries experiencing cutbacks as result of the pandemic, the oil and gas market is no different. Just since our last issue was published in July, there has been a wave of bank-ruptcies in the industry, the majority of which are companies that do business in the upstream segment. According to the law rm Haynes and Boone, $55.1 billion in debt has been brought to U.S. bankruptcy courts with a total of 225 lings in the E&P market since the beginning of the year. The second quarter had the most bankruptcies since 2016. The largest oileld service company ling for bankruptcy so far this year is Diamond Offshore Drilling with $11.8 billion in debt followed by Chesapeake Energy, a shale producer, that led with more than $9 billion in debt.Since March, the oil and gas industry has laid off 99,000 employees: 59,000 in Texas, 9,700 in Louisiana and 8,800 in Oklahoma. In addition, Colorado, New Mexico, California and Pennsylvania lost about 4,000 jobs each. The Bureau of Labor Statistics data indicates 44,500 jobs have been cut from oileld service companies, 23,000 from drilling and extraction, and 16,000 from pipeline companies. Major companies, such as BP, Halliburton, Schlumberger, Baker Hughes, BJ Services and Weatherford, have eliminated employees from their payrolls. The clean energy sector also lost 27,000 jobs since May.A gloomy 2020 indeed; however, the paycheck protection program has helped businesses, large and small, get through the early stages of the pandemic. There has been ongoing support locally to help struggling businesses and individuals with business loans, grants, rental assistance and extended unemployment benets. Besides the $300 per week supplemental unemployment benet President Trump authorized, Congress is discussing additional aid to businesses and working on another round of stimulus payments.Let’s end on a brighter note and continue to look for the good news in our industry. In this issue of OILMAN, we’ve published a sneak peek to OILWOMAN Magazine. The new and exciting publication will print with OILMAN on the ip side. In OILWOMAN, we’ll prole women in a variety of roles that span the entire oil and gas industry and discuss topics in renewable energy, diversity, equity and inclusion (DEI) and workforce training. Be sure to take a look at the sneak preview and we hope you’ll be as excited as we are about the premier issue in November.

Page 5

Page 6

Oilman Magazine / September-October 2020 / OilmanMagazine.com4OILMAN COLUMNOILMAN COLUMNDetermining which automatic tank gauge works for a specic application is more complex than simply comparing product prices or performance speci-cations. There are numerous factors associated with installing a gauge that can inate costs and cause an operator to exceed budget. These factors can lead to expenses that overshadow the cost of the level transmitter itself. The most signicant of these factors includes the need for tank modica-tions, cabling and conduit, and auxiliary equipment. Operators specifying a spe-cic level transmitter should work with manufacturers to determine the estimat-ed installed costs of the main automatic tank gauge technologies. Only then can they choose the technology that meets their needs within their budget.What Options are Available?First, operators need to understand their options. There are three promi-nent level measurement technologies used in aboveground storage tanks in the upstream oil and gas market. They are Magnetostrictive, guided wave radar (GWR), and ultrasonic based technolo-gies. Each technology offers specic benets that meet the needs of different customer applications. Each utilizes different technologies to measure liquid levels. A GWR level transmitter determines the liquid level in the tank by taking a time of ight measurement by sending a microwave signal and waiting for the return reec-tion from the liquid. The GWR has a rod or exible cable that goes inside the tank and provides a guide on which the microwave signals can travel. An ultra-sonic level transmitter is similar to GWR as it is a time of ight measurement, but it does not have a guide to direct the waves and it uses sound waves instead of microwaves to determine the level measurement. Both technologies need to be calibrated to the tank based on its size and product.Magnetostrictive level transmitters use the time-based Magnetostrictive position sensing principle. Within the sensing element, a sonic strain pulse is induced in a specially designed waveguide by the momentary interaction of two magnetic elds. One eld is generated by a per-manent magnet sealed inside of a oat while the other eld is generated from an “interrogation” current pulse ap-plied along the waveguide. The resulting strain pulse travels at ultrasonic speed along the waveguide and is detected at the head of the sensing element. The position of the magnet is determined by accurately measuring the elapsed time between the application of the inter-rogation pulse and the arrival of the resulting strain pulse. Magnetostrictive level transmitters are built to order and do not need to be calibrated in order to function in the tank.Are Tank Modications Necessary?One of the rst considerations engi-neers and site managers need to make when estimating installation costs is how much existing tanks will have to be modied. Most were not fabricated to accommodate the various gauges and other equipment required. While some tanks require no modication, others can require considerable alterations. The two factors that need to be considered are costs for new tank openings and the cost for stilling wells. These can vary signicantly depending on the technol-ogy used and the preexisting nature of the tank.Every additional opening cut into the tank increases the modication costs. Multiple openings are needed when a single gauge does not provide all of the necessary process variable measure-ments. Most tanks are looking for a mea-surement of product level, interface level and temperature to control the process. GWR and Ultrasonic level transmitters are only able to provide a level measure-ment and require separate devices to provide temperature. Magnetostrictive level transmitters provide a denite advantage in these applications because they incorporate a 5-IN-1 design, which allows for the measurement of product level, interface level and temperature to be measured from a single tank opening, but also gives volume measurement and an HI Level Switch as featured in the Estimating Installation Costs for Automatic Tank Gauges By Lee AikenPhoto courtesy of iStock

Page 7

Oilman Magazine / September-October 2020 / OilmanMagazine.com5Photo courtesy of MTS SensorsOILMAN COLUMNOILMAN COLUMNLevelLimit by MTS Sensors. The ability to provide automatic tank gauging and overll protection from a single opening helps increase safety while minimizing expenses.The second factor is the need for stilling wells. Depending on the details of the application, some level technologies can be installed without the need for a stilling well, allowing for lower installed costs. If available, all three level tech-nologies should be installed in a slotted stilling well for the most accurate level measurement. In addition, stilling wells are typically required to allow the addi-tional interface and temperature mea-surement instrumentation to perform correctly. This need is best determined by the manufacturer, who can easily tell you if a stilling well is required. For most applications, the Magnetostrictive level transmitter does not require a stilling well and helps minimize cost.How Do Cabling and Conduit Affect Price?Cabling and conduit needs differ sig-nicantly based on the level technology used and are not included in the stan-dard cost of automatic tank gauges. To determine the costs of the cable, simply access the installation manual for the manufacturer’s cable specication. Some level transmitters require separate power and communication cables or specialty cables. A slight change in cable require-ments can cause a signicant change in price.Wiring topology also affects the overall cost. Analog outputs require direct connection between the level transmitter and the host system, while bus networks wiring allows sharing cabling and reduces the amount of cable needed. Some level technologies require individual power cables but will share the communication cable. All of these options should be evaluated based on their cost as it relates to the level technology chosen.The MTS LP-Series offers Modbus RTU output over a RS485 network. The cable can be shared with power and communication lines and have a bus topology to minimize the overall length of the cable run. The cable requirements are standard communication cable. All of this helps the LP-Series maintain an attractive installed cost.What Auxiliary Equipment is Needed?The costs of auxiliary equipment can be determined through a site survey and an ofcial quote from the manufac-turer. Far too many site managers and engineers overlook this step only to nd themselves with hefty costs related to auxiliary equipment later. A site survey will reduce the likelihood of surprises. Examples of auxiliary equipment are heaters for cold weather applications, protocol converters for proprietary protocols, specialty tools for service or installation, and licensed software. The Magnetostrictive LP-Series from MTS does not need any auxiliary equipment to perform. The installed base covers the spectrum from warm tropical climates in Colombia to cold climates on the North Slope of Alaska. The LP-Series also features industry standard protocols of HART® and Modbus RTU that can connect directly to most controls systems. MTS provides free software for troubleshooting and commissioning is included in each shipment. There are no hidden costs for the LP-Series.Making an Informed DecisionInstalling an automatic tank gauge system can be more complex than it rst seems. All factors, including tank modications, cabling and auxiliary equipment must be considered in order to remain in budget. In most situations that require installing on existing tanks, Magnetostrictive level transmitters have the lowest installed cost over GWR and ultrasonic. The main difference is the 5-IN-1 measurement capability of the LevelLimit by MTS to measure the product level, interface level, temperature, volume, and a HI Level switch from a single tank opening. Operators who work closely with the manufacturer to understand what they need and how technologies differ will be better informed and able to make a decision that lowers costs without sacricing the performance they need.Lee Aiken is the Global Market Seg-ment Leader, Liquid Level for MTS Sensors and an active member of API committees for Ch. 3.1b and Ch. 18.2. With over 12 years of experience with automatic tank gauging, he has been published in several magazines, hosted webinars, and taught at ISHM. Aiken has a Master’s of Business Admin-istration (MBA) and a bachelor’s in electrical engineering from North Carolina State University.

Page 8

Oilman Magazine / September-October 2020 / OilmanMagazine.com6OILMAN COLUMNBy taking advantage of reduced inac-curacies and improved productivity thanks to AI, the oil and gas industry can enjoy faster data analysis and more informed business decisions.Beginning in the early 2000s, the term “digital transformation” became a buzzword in the oil and gas industry. Nearly every major energy company set its sights on creating a “Digital Oileld” that would capture vast amounts of data and allow for better logistics, analytics and modeling. Other industries managed to accomplish this by utilizing a new wave of available computing power, storage and the use of articial intelligence (AI). Why has the oil and gas industry lagged, com-paratively speaking? Why can’t major oil and gas companies manage their inven-tory with the speed and precision of the likes of Amazon or Google? What keeps them from creating the ideal “Digital Oileld”?AI Challenges in an Asset Heavy Industry First, consider the expansive scope and scale of oil and gas assets that are cur-rently operating in the U.S. According to Ralph E. Davis Associates, there are 469,616 active oil wells, 131 operating reneries, 1320 active terminals and, in 2019, there were 224,045 miles of active oil pipelines. Given that a single oil well can produce one terabyte of data per day, the amount and depth of data generated at every step of the sup-ply chain is immense. However, Cisco estimates that oil and gas companies currently use only about two percent of the data that they generate due to a lack of transfer capability, storage capacity and computing power. Unfortunately, it’s much more difcult to track a massive volume of crude traveling through a pipeline than it is to simply scan a radio-frequency identi-cation (RFID) on a boxed package along its route from a warehouse to your front door. Therefore, compar-ing logistics involved in the oil and gas industry to a company like Amazon is a bit like comparing motorcycle repair to xing a bicycle. Although the technol-ogy energy companies need to track, optimize and schedule logistics exists, implementing such a sophisticated system can be difcult, especially when dealing with a number of problems derived from poor data.Where is AI Already Being AppliedGiven the myriad of benets, one would think the adoption rate of AI in the oil and gas industry would be high; however, the reality is that the degree of industry-wide acceptance is just scratching the surface. Effective imple-mentations of AI can be seen primarily in the upstream sector. In the Permian Basin, for example, technicians histori-cally spent much of their time driving from one remote oil well to the next checking systems and collecting data, then driving back to the central ofce at the end of the day and uploading it.To reduce this inefciency, ExxonMo-bil’s subsidiary XTO Energy partnered with Microsoft’s Azure AI platform to transform its daily operations by creating an AI cloud infrastructure that continuously monitors and uploads data. This not only enables technicians to focus on wells that may require more evaluation and maintenance, but it also allows for more accurate well analytics and future enhancement modeling by eliminating data silos.How Can AI Benet My Company?Sometimes the hardest part of implementing an AI platform is determining where it could add value to the organization. Below are just a few examples of AI platforms that can enable oil and gas companies to operate with more agility, efciency and accuracy than ever before. Amazon Fulllment Centers – Source: FREIGHTOSU.S. Crude & Petroleum Product Terminals – Source: EIAAI’s Critical Role in The Digital Transformation Journey By Patrick O’Brien

Page 9

Page 10

Oilman Magazine / September-October 2020 / OilmanMagazine.com8As discussed in an article written by Rob Roberts, the foundation of any AI platform implementation strategy is an effective Master Data Strategy (“MDS”). Major energy companies have operations all over the world. As groups form based on products, loca-tions and functions, data silos lled with information can be locked away. Data silos can also lead to duplica-tions, different classications of the same data, and other issues stemming from a data compilation phase of an enterprise-wide software. An MDS eliminates silos and then integrates and cleanses data for AI use. The Future Impact of AIAI platforms require rigorous planning, building, software selection, appropriate assembly of personnel, and implementation – all of which need to be conducted in an organized manner to be effective. Rushing through any one of these phases will inevitably lead to failures and cause the entire project to lose momentum. We at Opportune stand ready to assist oil and gas companies every step of the way during their digital transformation journey. The savings generated by AI’s analyti-cal models have forced companies to focus on how they can use AI plat-forms to be more efcient, effective and get a leg up on their competi-tion. Sometimes, all it takes is for one organization to push its limits in order to prove its effectiveness and dra-matically shift the best practices of an entire industry.The next installment of this mini-se-ries will focus on some considerations that allow the implementation process of an AI platform to be as easy and effective as possible. This is the rst installment of a three-part series discussing AI’s potential and critical role in oil and gas, how a company can prepare for an AI platform, and important steps to executing a sound AI implementation. Patrick O’Brien is an intern with Opportune LLP’s Process & Tech-nology group. Cur-rently attending Texas A&M University, O’Brien is concur-rently pursuing an undergraduate degree in chemical engineering and an MS in nance. Source: GTM ResearchOILMAN COLUMNSUBSCRIBE TODAY!Get the Oil & Gas news and data you need in a magazine you’ll be proud to read. To subscribe, complete a quick form online:OilmanMagazine.com/subscribe Questions? Call or email anytime.Editor@OilmanMagazine.com • (800) 562-2340 Ex. 5

Page 11

Page 12

Oilman Magazine / September-October 2020 / OilmanMagazine.com10OILMAN COLUMNAlthough awareness of the safety solutions offered by unmanned aerial systems (UAS) – aka drones – has recently spiked across the healthcare community due to the coronavirus cri-sis, perhaps one of the fastest growing uses of this burgeoning and advanced technology is within the oil and gas industry. Not only can drones be used for asset inspection and repair at large scale energy facility sites, but now a new breed of bots is able to monitor work-in-progress in all environments and across natural elements by travers-ing land and swimming in the water! The advent of spherical, amphibious and all-terrain drones is creating a powerful complement to their airborne counterparts to achieve better business practices, streamline solutions, increase safety and elevate protability across the entire energy eld.But the key to conducting successful missions is in the cloud! Program-ming any type of drone hardware with customized capabilities enables it to collect, analyze, store, model and share data in real time, giving oil and gas engineers the ability to transform bots and UAVs into powerful, autonomous, AI-infused entities for complicated mis-sions in surveillance, security, detection and repair. Besides a variety of aerial drones with highly specialized vertical takeoff and landing (VTOL) functions, spheri-cal drones offer total environmental protection and ultimate precision to the profession by traversing all types of ter-rains, including paved roads, dirt paths, sand dunes, snowy elds, sloped moun-tains and ocean surfaces. These radi-cal bots can range from six and a half inches to seven feet in diameter and move uidly in a forward and backward motion, as well as make 360-degree turns, reaching maximum speeds of 12 mph on land and three mph in water. Each one contains interchangeable sensors, such as video cameras, ther-mal, infrared, microphones GPS and audio for continuous content gathering, transmission of data and constant com-munication for command and control (C2). What’s more, they can operate up to 25 hours on a single charge. Further, through cloud-based connectivity, land and sea drones can be paired to communicate with their ying counterparts for a strong and seamless unmanned system (US) that works together in solving crucial oil and gas infrastructure challenges in a way that is more efcient, cost-effective and safer than traditional methods. Here’s how:Reduce Costs – A UAV can be used to automate complex tasks and therefore reduce labor costs. Instead of incur-ring thousands of dollars in helicopter operational costs for most aerial mis-sions (inspection of a are-stack, for instance), UAVs can be used for a frac-tion of the cost, while providing better accuracy through the use of multiple sensors on the same platforms.Increase Safety – In areas that have been exposed to contamination by an oil spill, a natural gas explosion or that are potential security threats, an Amphibious, All-Terrain and Airborne Drones Enhance Efficiency in Execution of Essential Services By Barry AlexanderPhoto courtesy of Dan Grytsku – www.123RF.com

Page 13

Oilman Magazine / September-October 2020 / OilmanMagazine.com11OILMAN COLUMNDrones are a cost-effective and highly efcient solution to a variety of industries, including military, security and surveillance, industrial, construction, farming and forestry.Aquiline Drones are subjected to rigorous and intense precision indoor training prior to being released on a eld mission.enterprise drone solution can enable organizations to explore these areas and even deliver supplies without exposing employees to dangerous risks.Increase Production – Keeping oil reneries and rigs operational ensures the smooth ow of product to cus-tomers. Clearly, the latest advancements in sensing and imaging technology are enabling drones to be deployed in a wide range of settings across the oil and gas industry to perform inspections as well as predictive maintenance of critical infrastructure. Specic applications, include:Pipelines – Drones have become the most affordable means to inspect the thousands of miles of pipelines trans-porting oil and gas around the world. These infrastructures must constantly be monitored to reduce the potential for undetected leaks, which may cause life-threatening res and explosions. Drones can be equipped with opti-cal sensors to inspect equipment for potential pipeline leaks and impending points of failure, infrared sensors to examine equipment and pipelines for heat signature anomalies, as well as normalized difference vegetative index (NDVI) sensors to evaluate plant life color differentials next to pipelines, which may also cause possible leaks.Power Plant Facilities – Commercial drones provide high-resolution, optical inspections of gas power plants and oil reneries and alerts of potential breaches and pending points of failure. The technology can also check efcacy, transmission lines and surfaces. Autonomous drones loaded with infrared sensors and computing on the edge can monitor such facilities using ISR functions.Emergencies – Distribution of single drones or entire drone swarms that include ground-based, amphibious and aerial combinations can safely assess a land or aquatic situation after a disaster, like an oil spill, or conagra-tion by utilizing photoelectric sensors that offer a rst-person view of heat signatures to evaluate re risk vectors using normalized difference vegetative index (NDVI) sensors. In addition, drones can be used to measure and quantify oil spills with the ability to assess where the oil is spreading, how quickly it is moving in the water, and the specic areas it has reached. This real-time information can determine where to send response vessels and recovers time previously spent on the process of damage detection.Transportation – Drones assist in natural gas tunnel and oil well evaluations, as well as the delivery of goods and supplies to key engineers and personnel across the entire distribution chain whether they are on land or the ocean.Water Systems – Inspecting offshore oil platforms is much more complicated than those on Continued on next page...

Page 14

Oilman Magazine / September-October 2020 / OilmanMagazine.com12the mainland and puts workers at a higher risk. Lengthy shutdowns can damage efciency and operations can be forced to go ofine. Using drones can help minimize these complications as they can transmit real-time information to the operator on the rig, while ying within meters of the offshore platform. HD video and still imagery can be provided from all angles – vital information that can be used to assess and plan necessary work in advance. Autonomous drones supplied with high resolution optical and infrared sensors can also be disseminated to monitor external boundary and internal surfaces of offshore oil facilities using ISR functions.Gas Emissions Monitoring – Oil and gas companies are constantly looking to reduce methane from operations to mitigate climate change and global warming. To achieve these objectives, drones with highly sensitive optical sensors can help monitor gas emissions over large critical sites and difcult to reach areas like hydrauli-cally fractured gas wells and make sur-veying, identifying and correcting leaks a simple task. Drones help reduce the cost of carrying out such inspections and allow safe 3D mapping of drill sites, gas pipelines, landlls and other municipal operations.Drones, whether aerial, land-based or aquatic, provide essential services to the entire energy industry through their virtual monitoring and surveillance, inspection and maintenance, methane management, emergency response and material handling functions. The total results and benet for all oil and gas companies that use comprehensive and enterprise drone solutions are exhaustive. Reducing costs, maximizing return on investment (ROI) and creating new business value in a safe, responsible and eco-friendly manner are the business justication for a well-dened enterprise UAV solution in the oil and gas industry!OILMAN COLUMNAquiline Drones offers best-in-class drone hardware and sensor packages for a variety of commercial missions.Command and control (C2) training includes Flight Control Software that guides drones from take-off to landing, noties pilots of any potential obstacles and ensures safe, close formation ights.Barry Alexander is a veteran airline pilot, who recognized the need for an aviation-inspired and real-time proprietary operating system (RTOS) to take commercial drone functionality to the next level and thus created Aquiline Drones (AD), the rst U.S.-based, comprehensive drone solutions company, comprised of highly experienced aviators, software engineers and IT gurus. With a customer-centric model, U.S.-based manufacturing, U.S. supply chain, and world-class MRO services, the company offers innovative ways to use drones in commercial activities.

Page 15

Page 16

Oilman Magazine / September-October 2020 / OilmanMagazine.com14OILMAN COLUMNReneries are petrochemical industrial plants where substances derived from crude oil and gas are obtained. Within their walls, transformation and ren-ing processes occur to obtain products such as gasoline, diesel, asphalt, kero-sene, liqueed gas, oils and fuel. To talk about reneries is to discuss movement worldwide.Today, rened hydrocarbons are the most vital source of movement in the world, despite their competitor: electric cars. In 2018, the number of electric cars per 1,000 people in China was 1.6 and in the United States that number was 3.4 people per 1,000 people. This means that the world will depend on rening processes for much longer.If we count the things produced in a renery, we notice that all derivatives have a signicant degree of volatility. Add to this the acidic and toxic ele-ments used to carry out these puri-cation and rening processes and we conclude that it is work that involves constant high risk because the slightest mistake can lead to tragedy. Beyond a solution including the use of protective equipment such as appropri-ate clothing, special nitrile gloves or insulator, articial respiration masks or suits to prevent environmental toxic-ity in controlled sectors, the best safety practices for the rening industry are based on the implementation of these resources as a small part of the entire system. The best way to avoid accidents is if they do not occur. Regulations are based on this principle, especially the ones created for work in reneries. Although most hydrocarbon rening industries worldwide adjust their safety and regulation mechanisms, there is a global standard rule provided by the American Petroleum Institute (API), composed of 180 operational rening safety standards, which are approved by the American National Standards Institute (ANSI). It should be noted that API standards are required in most countries for reneries to operate safely. API Standards Base for Safety RegulationsThe 180 regulations of the API created for the industrial rening complex are based on avoiding accidents, consider-ing solutions in the form of regulations, with the use of the pyramid created in 1931 by H. W. Heinrich. This pyramid is represented with two key concepts in the eld of safety as established by the API document titled “Process Safety Indicators for the Rening and Petro-chemical Industries.”• Safety accidents can be placed on a scale representing the level of con-sequence.• Many precursor incidents occurred with lesser consequences for each accident that occurred with greater consequences.• Pyramid tier 1 events refer to safety events that are represented as the most consequential incidents as the result of real containment losses. This type of accident is closely related to the loss of toxic or volatile uids in the facilities.At this tier of the pyramid, the regula-tions established by the API that inte-grate the proper management of the processes within the facilities enter the scene to avoid possible spills of hazard-ous substances, either volatile or toxic.In the Recommended Practices (RP) 2001, provided by the API in 2019, it is mentioned that the best ally to deal API Foundation for Refinery Safety Regulations By Andres OcandoPhoto courtesy of ConcaweSafety pyramid. Image courtesy of API

Page 17

Oilman Magazine / September-October 2020 / OilmanMagazine.com15OILMAN COLUMNAPI Workplace Injuries and Illnesses Safety Report. Source: APIwith process failure and to avoid Tier 1 of the Heinrich pyramid, is the cor-rect digitalization of the industry. This limits the intrusion of human error and does not put lives in jeopardy, using PLC valves, and sensors for detection of leakage and odors, under the man-agement of the supervisory control and data acquisition system (SCADA), added to the standard emergency spray-ing systems for reneries. • Tier 2 of the pyramid sets out spill events with respect to inert uids that may cause problems of minor consequences, but these in turn may cause major operational problems in the facilities.What is established by the pyramid encourages the rules of best practices to have as the main alert for the second tier of the pyramid, where a failure not visualized on time generates an unexpected spill which, despite containing a non-toxic or dangerous substance for human personnel, marks an Amber Alert in the mechanisms of action, and encourages the inspection and reconditioning of all processes before and after this. The API in its RP 2001 (8th edition) mentions this point in particular and establishes a series of action rules in view of these situations, including the use and implementation of the SCADA system for the management of diluent pumping toward the distillation and enrichment processes of hydrocarbons, as well as the presence of highly quali-ed and experienced personnel to avoid unnecessary alarms in case of spills. • Tier 3 of the Heinrich pyramid ad-dresses problems related to weak-nesses in safety systems, ranging from the entry of unauthorized per-sonnel into a certain area, to a failure in the inspection of the raw material entering the renery, as well as the inspection of automated processes.For the correct prevention under this tier, the use of experienced personnel is established as well as automated pro-cesses to perform multiple random and periodic inspections in the established safety systems. In this way, the auto-mated system is constantly inspected and the personnel is kept alert to be prepared for any unexpected event. • The lowest tier of the pyramid deals with operational discipline and performance in process manage-ment systems. This is addressed to those responsible for compliance with the methodologies expressed in the operating manuals, i.e., human personnel, their degree of discipline, experience and commitment to com-ply with what is programmed. The lack of personnel training is one of the main reasons for operational problems in reneries. In the RP 2001 document (9th edition), it makes special mention of the training of those in-volved in the development of process-es, as well as the correct employment in the activities corresponding to qualied personnel. The 187 parameters intended by API and the American National Standards Institute(ANSI) for a safe environment in ren-eries, in addition to being a requirement for operation, are an alternative that, if followed to the T, give the system an almost foolproof functionality, as explained in the document “Comments of the American Petroleum Institute,” prepared by the API for the State of Washington in 2018, in which an as-sessment of reneries on U.S. territory was conducted.It should be noted that the U.S. govern-ment requires the operation of rener-ies under API regulations. The results show that the 187 standards established under the RP 2001 document, in all its editions, fulll the goal of establishing a safe environment by far.In this exercise, 520 companies from Continued on next page...

Page 18

Oilman Magazine / September-October 2020 / OilmanMagazine.com16both the public and private sector were compared with reneries operating under the standards established by the API. The result is that the number of accidents per year is 0.6, regarding important cases.On the other hand, the API conducted a survey in recent years, collecting safety data during the processes. Process safety involves the application of good practices of operation, maintenance, inspection, engineering and processes, i.e., compliance with the Heinrich pyramid. These are the results: The study was conducted from 2012 to 2016 and included approximately 85 reneries per year. The analysis was based on the problems related to tier 1 and 2 of the Heinrich pyramid divided into 200k hours of work per man. The results showed that the practices established by the API for the management of operations in reneries kept the cases of danger or accident to a non-existent amount. In light of these results, there is no doubt that the best practice for an environment free of accidents is prevention based on the prediction of possible accidents, from minimal circumstances that can lead to major problems. The 180 regulations prepared by the API as regulations for the proper functionality of the reneries are guaranteed as the best way to avoid accidents (this type of document obeys a copyright and may not be used unless the proper training is obtained). Thanks to this document, it is now a federal requirement that a renery must have a permit to operate. It also requires training of personnel by the Occupational Safety and Health Administration (OSHA).The use of helmets, safety suits and gas masks are the rst line of defense for workers in reneries but, if the degree of danger with which workers do their job every day is analyzed, it can be concluded that without a proper and hermetic safety system the zero accidents goal cannot be achieved. Automation and process management followed to the T are here to stay, and every day they save more lives and jobs. Andres Ocando, 30, is a petroleum engineer, who has been working for PDVSA for ve years, in positions such as reservoir engineer and geome-chanical engineer. He currently works as a project analysis engineer. There, he has optimized the data collection process for the develop-ment of geomechanical models.He has experience in copywriting and is currently a technical writer on topics related to the oil and technol-ogy industries. He collaborates on important technical magazines such as OILMAN and SPE. Quality and responsibility are two words that describe him perfectly.Ocando is currently pursuing higher studies at the University of Zulia to obtain a master’s degree in petroleum engineering. OILMAN COLUMNAPI Process Safety Event (PSE) Public Reporting per API RP 754. Source: APISUBSCRIBE TODAY!Get the Oil & Gas news and data you need in a magazine you’ll be proud to read. To subscribe, complete a quick form online:OilmanMagazine.com/subscribe Questions? Call or email anytime.Editor@OilmanMagazine.com • (800) 562-2340 Ex. 5

Page 19

Page 20

Oilman Magazine / September-October 2020 / OilmanMagazine.com18OILMAN COLUMNA sense of normalcy is returning to the oil patch, at least compared to the roller coaster ride that took place in March and April of this year. For much of this summer, WTI has hovered around $40/barrel, giving operators some stability in pricing and the chance to make money in some of the more cost-effective portions of the Permian, Delaware and Eagle Ford plays. And with Chevron’s recent blockbuster purchase of Noble Energy, many have predicted a return of robust acquisition activity to oil and gas plays in Texas.But a recent Texas Supreme Court decision suggests that parties acquiring oil and gas leases may face a challenge they did not anticipate in the past: consent-to-assign provisions that courts may be ready to enforce.Most energy lawyers and landmen have seen plenty of consent-to-assign provi-sions in leases, farmout agreements and other oileld agreements. In general, these agreements come in two variet-ies: “hard” and “soft.” A hard consent allows a party to decline to consent for any reason (or no reason). A soft con-sent requires a lessor’s consent, but the lessor cannot “unreasonably withhold” that consent.Texas courts have recently looked at each of these types of clauses, with implications for oil and gas acquisitions throughout Texas. Hard Consent: Possibly Enforceable in Texas?Many Texas energy lawyers will tell you that hard consents for oil and gas leases are not enforceable under Texas law. This is because Texas (and other states) reject unreasonable “restraints on the alienation of property,” i.e., we do not want to stop people from buying and selling property, including oil and gas leases. With this default, most lawyers think that Texas courts, when presented with such a clause, would nd it unen-forceable and strike it from the contract.But the Texas Supreme Court’s decision last year in Barrow-Shaver Resources Company v. Carrizo Oil & Gas, Inc. may call this analysis into question. Car-rizo was a lessee on a 22,000-acre lease in north-central Texas. Barrow-Shaver was prospecting in the area, trying to form a large drilling prospect. The parties entered a farmout agreement, under which Barrow-Shaver would earn a partial assignment of Carrizo’s interest in the lease in exchange for its services in drilling a producing well. The parties negotiated a consent-to-assign provision that required Carrizo’s consent to any Barrow-Shaver assignment:The rights provided to [Barrow-Shaver] under this Letter Agreement may not be assigned, subleased or otherwise transferred in whole or in part, without the express written consent of Carrizo.Later, Barrow-Shaver wanted to assign its interests in the farmout to a third party, Raptor Petroleum. It secured the consent of many parties, but Carrizo did not consent to the assignment. In-stead, it offered to sell its interest in the lease to Barrow-Shaver for $5 million – a deal Barrow-Shaver did not accept. When Carrizo did not consent, Barrow-Shaver’s deal with Raptor fell through. Barrow-Shaver sued Carrizo and alleged that the consent-to-assign provision was silent when it came to why Carrizo could withhold consent. Based on this purported silence, Barrow-Shaver introduced testimony from a noted oil and gas law professor, who testied that “charging for consent to assign is inconsistent with the custom and usage Buyer Beware: Consent-to-Assign Provisions in the Oil Patch By Christopher HoganPhoto courtesy of zhengzaishuru – Canva.com

Page 21

Oilman Magazine / September-October 2020 / OilmanMagazine.com19OILMAN COLUMNof the industry” and that Carrizo’s refusal to consent was a breach of the farmout. The jury agreed and awarded $27.6 million in damages for breach of the farmout.The Texas Supreme Court had to determine whether Carrizo breached the consent-to-assign provision. The Court noted that under the farmout, the consent needed to be express and in writing, but had no other require-ments, including any requirement of reasonableness. And the Court declined to create any kind of implied duty – meaning a duty that would exist even if not mentioned in the agreement – of reasonableness. And despite Texas’s prohibition on unreasonable “restraints on the alienation of property,” the Court passed on using this standard to imply a reasonableness requirement for the consent-to-assign provision. Could this rejection of an implied reasonableness requirement be the sign of a sea change when it comes to hard consents in Texas oil and gas leases? The core of the farmout agreement is the assignment of a party’s fee interest in a lease, exactly the kind of interest transferred when a lessee assigns a lease to a third party. If a hard-consent provision is enforceable when it comes to farmouts, perhaps they are for standard lease transfers, too.If so, acquisitions like those of Chev-ron may become quite a bit harder. As a practitioner, many leases I see have consent-to-assign provisions, and it seems like many acquiring parties skate over them. But if they prove to be enforceable, future large-scale transac-tions may become increasingly difcult as they will depend on securing the approval of dozens – if not hundreds – of third parties.There is also reason to think that courts will not apply the Barrow-Shaver case to simple lease acquisitions. The Texas Su-preme Court did emphasize that a farm-out involves more than just transferring property. It also contemplates that the acquiring party will render services (e.g., the drilling of wells) after the property transfer. Personally, I think future courts will nd this distinction important and continue to reject hard-consent assign-ments unrelated to farmout agreements.Soft Consent: A Checklist for ReasonablenessOperators looking at a soft consent-to-assign provision have often been wracked by the same question: what is an “unreasonable” refusal to consent to an assignment? Until recently, Texas courts provided little guidance on this question. But the Northern District of Texas recently provided a roadmap for operators to follow on this question.The Court’s decision in Mayo Foundation for Medical Education & Research v. BP America Production Company involved a lease amendment that did not permit the lessee to transfer the lease without the lessor’s consent, which “shall not be unreasonably withheld.” When the lessor and lessee got in a dispute about assigning the lease, the issue landed in federal court.The Court had to determine if the les-sor’s refusal to consent was reasonable. This was a difcult inquiry, as no other Texas court had outlined how to deter-mine reasonableness in this scenario. So the Court outlined a list of several factors to consider when determining whether a party’s refusal to consent to an assignment is reasonable:• the buyer’s solvency and record on making prompt royalty payments;• the buyer’s industry reputation for honesty and reliability;• the buyer’s prior working relationship with lessor;• the buyer’s ability to run the leasehold in an efcient manner;• whether the buyer is a “lease ip-per” that will not actively develop the property; and• whether the buyer would increase the number of non-cost bearing interests on the property, such as overriding royalties and production payments.Looking at all these factors, the Court found the lessor’s refusal to consent to the assignment was unreasonable and refused to enjoin the transfer.Takeaways for Operators Looking to Acquire LeasesThe two cases discussed above deal with different consent-to-assign provisions, but they both show that these clauses could throw a wrench into a potential burst of oileld acquisition activity. If future courts read Barrow-Shaver to permit hard consent-to-assign provi-sions going forward, operators will need to be extra diligent to make sure they check leases they are looking to acquire for these provisions and secure consent. The Mayo Foundation case shows that courts may not void soft consent-to-assign provisions, but also provides the criteria that courts will likely consider in determining whether a lessor is being reasonable. By considering these fac-tors in advance, operators faced with an obstinate lessor (or one who wants to squeeze out some extra money in exchange for consent) should have a better idea how they’ll fare in court if they have to litigate the issue.If a wave of acquisitions does indeed hit the oil patch, buyers should keep a close eye on any consent-to-assign provisions and consider the effect of these clauses before going on a buying spree. Christopher Hogan is a founding partner of Hogan Thompson LLP, a Houston-based commercial trial boutique with a focus on representing energy companies operating in the Permian Basin, Eagle Ford Shale, and other oil and gas producing areas. Hogan has successfully represented energy clients in numerous arbitrations and in both Texas state and federal jury trials. The rm’s client roster includes Fortune 500 companies Chevron, EOG, Marathon Oil, BP, and Ovintiv, in addition to Callon Petroleum and Escondido Resources.

Page 22

Oilman Magazine / September-October 2020 / OilmanMagazine.com20OILMAN COLUMNIn 1912 the French geophysicist Con-rad Schlumberger, after recording the rst geological map of equipotential curves, applied the data to locating iron ores and subsurface structures that could form traps for miner-als such as oil and gas. Conrad and his brother Marcel were pioneering petroleum engineers from France’s oil-rich Alsace region who 14 years later founded Schlumberger Ltd. In 1927 a crew working for Schlumberger in the historic Pechelbronn basin of Alsace lowered an electric sonde (a transmit-ter tool) down a well in the oil sands, creating the rst well log in history and the birth of wireline logging. Still widely used in drilling operations, wireline logging acquires data by lower-ing electrically powered instruments down a well shaft to record critical measurements after a well is drilled. As oil and gas exploration pursued deeper reservoirs, newer logging technologies such as Measurement While Drilling (MWD) enabled operators to obtain data during drilling – instead of after – at higher and more extreme angles. In-troduced in 1980, MWD offered added exibility for oil wells in areas where wireline logging and other traditional measurement tools were not practical options. Four decades later, MWD is an integral part of many drilling op-erations, providing wellbore position, drill-bit and directional data, as well as real-time drilling information.MWD technology allows oil and gas companies to drill directional and horizontal wells to depths of 40,000 feet – equivalent to almost six-and-a-half times as deep as the Grand Canyon or 15 times the height of the world tallest building, Burj Khalifa in Dubai. Yet wells that deep present signicant challenges in transmitting MWD data to the surface without interruption. Sophisticated telemetry systems associated with MWD can mitigate this problem, but not all systems are alike. Understanding the features of the most common MWD telemetry will help drilling operators choose the right MWD for the job. Mud Pulse TelemetryMud pulse telemetry is the most common method of MWD wireless transmission. As the name suggests, data derived from measurement tools is encoded into pressure pulses that are transmitted to the surface through a mud channel. This signal is received on the surface using pressure transducers and then decoded to produce real-time reports.Within the scope of mud pulse telemetry, three types are associated with MWD: • Positive pulse telemetry deploys a valve that is repeatedly opened and closed to restrict the mud ow within the drill pipe, producing an increase in pressure that is visible at the surface. On the plus side, posi-tive pulse systems provide a strong signal that is easy to modulate; on the minus side, this method suffers from low data throughput.• Negative pulse tools briey open and close the valve to release mud from inside the drill pipe out to the annulus, producing a decrease in pressure that can be seen at the surface. Negative pulse systems are simple to design, making them very reliable, but these systems are also subject to low data throughput. • Continuous wave telemetry systems generate sinusoidal pressure uc-tuations within the drilling uid, encoding the digital information in the pressure wave. Continuous wave provides the highest telemetry rates as compared to positive and nega-tive pulse systems; however, this type of system is more susceptible to jamming from debris.Although mud pulse telemetry provides relatively low transmission Choosing the Right MWD Telemetry System Reduces Well Delivery Costs By Shadi MussaPhoto courtesy of Shadi Mussa

Page 23

Oilman Magazine / September-October 2020 / OilmanMagazine.com21OILMAN COLUMNrates, most of these systems use compression to reduce the size of the data, allowing more data to be transmitted to the surface.Mud pulse systems are extremely reli-able and cost-effective when the mud and pumps system can provide for good data transmission. Effective use of any mud pulse system requires mud properties that align with the speci-cations of the MWD service. Using pumps that are in good condition, with pulsation dampeners charged, will help ensure that your mud pulse telemetry is not attenuated or interrupted. Electromagnetic TelemetryElectromagnetic (EM) telemetry encodes the data from the downhole assembly onto a carrier signal that is transmitted by electromagnetic waves through the earth. This signal is received at the surface through ground stakes and then decoded. EM technology is mainly used for drilling operations on land, as receiving the EM signal in offshore rigs requires putting the stakes in the seabed, which can be a complex operation. EM signals travel faster than mud pulse, delivering almost-instantaneous update rates and reducing latency between data acquisition and receiving such data on the surface.One of the major advantages of EM-MWD is its ability to work bi-direc-tionally, transmitting data both uphole and downhole. Another advantage is that EM technology has no rotating or mechanical parts, which improves tool reliability and reduces maintenance costs, producing an overall more cost-effective option when compared to mud pulse telemetry. Finally, EM is not dependent on the mud channel or mud pumps, which can make it suitable for more aggressive mud systems, as well as air or foam drilling. Despite all these advantages, EM has one signicant drawback in that the EM signal may attenuate quickly due to resistivity in the formation or surface noise generated by electrical equip-ment. When employing EM, proper EM signal modelling is required prior to running the service to evaluate sig-nal’s strength and quality.Acoustic TelemetryAcoustic telemetry is another methodology in which the downhole data is encoded into a sound wave that is transmitted through drill string or Drilling depths to 40,000 feet, far exceeding the deepest and tallest natural and man-made structures, requires sophisticated telemetry systems for uninterrupted data transmission. Continued on next page...SUBSCRIBE TODAY!Get the Oil & Gas news and data you need in a magazine you’ll be proud to read. To subscribe, complete a quick form online:OilmanMagazine.com/subscribe Questions? Call or email anytime.Editor@OilmanMagazine.com • (800) 562-2340 Ex. 5

Page 24

Oilman Magazine / September-October 2020 / OilmanMagazine.com22the earth formation and received at the surface through an acoustic probe installed at the well head. The data is then decoded and interpreted for use during the drilling operation. Sound waves travel faster and are denser than air, which helps to reduce the latency in the transmission. Like EM, acoustic telemetry is not affected by the mud channel, and thus makes this system easier to operate than any of the MWD mud pulse systems.While acoustic MWD provides high data rates as compared to EM and mud-pulse, the fast attenuation of sound waves requires that wireless repeaters be placed in the drill string, which generally makes this service more costly than EM and mud pulse telemetry systems. Wired Drill Pipe Wired drill pipe (WDP) is a wired telemetry system that connects the surface system to the downhole tools through a conductor wire and special connections that are incorporated inside the drill pipe. WDP has multiple advantages over all other wireless telemetry systems, starting with superior telemetry rates that allow you to monitor all the measurements from downhole in real-time, which allows for and promotes faster drilling without holding back to steer and place the wells more ac-curately. Additionally, WDP utilizes extra sensors placed along the drill string to measure the pressure and temperature, enabling monitoring for hole cleaning and other important parameters such as equivalent circula-tion density (ECD), which plays an important role in reducing well con-trol issues and stuck pipe situations. WDP also provides real-time updates of downhole shocks and vibrations, allowing more effective mitigation to reduce damage to downhole tools. With developments in rig automation, WDP provides a closed loop system for downhole and surface automation that drastically increases efciency and reduces drilling risks and costs. The initial investment required to wire the pipe and downhole tools for WDP to create this closed loop system is a stepping-stone toward digitizing the oileld, which would spur the biggest oil services advancement in a generation. Hybrid Telemetry Some MWD systems combine multiple types of telemetry, such as mud pulse and EM, to allow effective switching from one system to another if drilling complexities arises. While hybrid telemetry may add cost to the project, it eliminates the need for longer trips to change downhole tools, reducing non-productive time. In today’s market, hybrid telemetry offers the best benets of mud pulse and EM systems by extending reliability with the intended redundancy of both systems, but because the EM signal is limited to land operations, hybrid systems are the best t for land drilling. For offshore operations, mud-pulse telemetry still stands as the strongest rival among all telemetry systems; however, because WDP signicantly reduces the cost and complexity of offshore drilling, I believe WDP is the ultimate MWD system for offshore drilling.In determining which telemetry is the best option for a project, you must understand the challenges and com-plexities of the drilling environment to select a system that will perform optimally in those circumstances. Fac-toring the well objective and environ-mental challenges into any evaluation of MWD systems is key to perform-ing successful drilling operations and reducing well delivery costs. Shadi Mussa is a global technology product champion for one of the world’s leading oileld services companies. An expert in communication engineering, petrophysics and telemetry, for two decades Mussa has specialized in innovative telemetry systems for advanced surveying, measurement while drilling (MWD) and logging while drilling. His signicant experience in drilling and measurements includes working in the two largest oil eld regions, the Middle East and North America’s Permian Basin. Mussa is a frequent speaker at industry events and was most recently a presenter at the 2020 IADC/SPE International Drilling Conference. OILMAN COLUMNElectromagnetic (EM) signal propagation from downhole MWD tool to the surface

Page 25

Page 26

Oilman Magazine / September-October 2020 / OilmanMagazine.com24OILMAN COLUMNAn effective AI platform needs a reli-able master data strategy and cloud computing source to build upon, as well as sound data integration and cleansing for optimal performance and outcomes. Over the last few years, adoption of articial intelligence (AI) by companies has surged 270 percent. Companies are pushing to invest more in AI technol-ogy and this trend is only going up. Despite the eagerness, however, AI applications are not simply plug and play. Just like construction, laying a solid foundation rst is crucial before anything can be built upon it. A reliable and sound master data strategy (MDS), cloud computing capabilities, and data integration and cleansing are all part of the foundation AI must be built upon.How Does My Master Data Strat-egy Connect With AI? Before discussing the connection between an MDS and an AI platform, let’s rst dene MDS and why its purpose is key to AI implementation. An MDS is how a company organizes its data and what gives it meaning or context to transactions and analytics. Master data can be internally or ex-ternally dened. It provides the who, what, when, where and why relating to business processes. An effective MDS is crucial to imple-menting an AI platform, as data is the fuel that powers AI analytics. As major oil and gas companies formed different segments of their enterprise based on geographic locations, operational lines, or even specic reneries, they inad-vertently created data silos. These data silos can trap data and may classify the same object with different names. An MDS should incorporate data from these silos, determine universal naming conventions, and clean data of dupli-cates and erroneous data. This drasti-cally reduces headaches and delays dur-ing the AI implementation process by avoiding the daunting task of digging through data to determine where and why the AI application failed.Why Is Cloud Computing and Stor-age Benecial to AI?The emergence of Amazon AWS, Google Cloud, and Microsoft Azure has led to an explosion of different use-cases and capabilities. Cloud com-puting and storage are incredibly ben-ecial to an AI platform because of its real-time data collection, data elasticity and global availability. The scalabil-ity of the cloud allows companies to increase data storage, and, therefore, enables them to grow on a global scale, particularly as their computing power needs expand over time. The cloud allows for IoT devices at remote oil wells to constantly upload data for faster compilation and AI ana-lytics than ever before. Data scientists currently spend about 80 percent of their time nding, retrieving, consoli-dating, cleaning, and preparing data for analysis and algorithm training. By leveraging the infrastructure provided by a cloud platform, all of these steps can be drastically reduced. Therefore, data scientists can focus on what’s truly important: building and training AI analytical tools to make them perform better, faster and more efciently. A new breakthrough in cloud comput-ing and storage is the emergence of data lakes, which can store structured and unstructured data, and relational and non-relational data, allowing the collection of raw data from a variety of sources like IoT devices, CRM platforms, and other current databases. Allowing an AI platform access to all this data enables it to run faster, more complete analytics without moving the data to a separate system beforehand. However, similar to planning an MDS, data lakes should be carefully con-structed to lend their architecture to better dening, cataloging and securing received data. For example, the data lake platform Snowake integrates with a company’s current cloud storage and transforms it into an effective, AI-ready data lake.Considerations Before Implementing AI in the Oil and Gas Industry By Patrick O’Brien and Ian CampbellSource: MIBAR.netSource: Amazon AWS

Page 27

Oilman Magazine / September-October 2020 / OilmanMagazine.com25OILMAN COLUMNHow Does Data Integration and Cleansing Connect to AI?Access to clean data is the lifeblood of any AI application. Data integration is the ability to view data from differ-ent sources together in one location, and this is needed in an AI project to connect all the necessary inputs to the application. However, in each place the data resides, it may be represented in a different format or coding language, and it may even be separated into silos or in the hands of different business groups with different priorities. To consolidate all of this data into one AI application, a process or computer program must be developed to extract the necessary data, convert it for AI use, and nally integrate it into the AI program. Data cleansing is sifting through it to ensure that it is: • Accurate• Complete• Consistent across datasets• Using uniform metrics• Conforming to dened business rulesIn the end, it ensures that your data is of the right quality to support the applications that use it, which is par-ticularly important to AI applications because of the massive quantities of data they consume. How to Get Started with Data Inte-gration and CleansingData engineers play a critical role in data integration and cleansing, with the goal of integrating data into systems across the company, including AI ap-plications. They typically have experi-ence with SQL and NoSQL databases, as well as other programming lan-guages that allow them to extract and transform data. Additionally, if data is in the hands of different business units, form a cross-business team to lead integration efforts. This ensures that as data is moved between business sectors, each sector gets the data it needs to do its job.Data must be cleansed on a regular ba-sis, referencing the standards and nam-ing conventions dened by the MDS. This will keep data uniform across the organization and maintain its integrity over time.TakeawayAI needs the proper support in order to make the magic happen. The tech-nological foundation provided here will ensure that AI can add value to the business. The next installment of this mini-series will discuss where and how to start an AI implementation project to achieve a sustainable and effective AI infrastructure. This is the second installment of a three-part series discussing AI’s poten-tial and critical role in oil and gas, how a company can prepare for an AI plat-form, and important steps to executing a sound AI implementation.Patrick O’Brien is an intern with Opportune LLP’s Process & Tech-nology group. He is concurrently pursuing an undergraduate degree in chemical engineering and an MS in nance at Texas A&M University.Ian Campbell is an intern with Opportune LLP’s Process & Tech-nology group. He is pur-suing an undergraduate degree in management information systems with a certication in business analytics at Baylor University. Source: Amazon AWSAdvertise with us!Are you looking to expand your reach in the oil and gas marketplace? Do you have a product or service that would beneﬁt the industry? If so, we would like to speak with you!We have a creative team that can design your ad! OilmanMagazine.com/advertise • Advertising@OilmanMagazine.com • (800) 562-2340 Ex. 1

Page 28

Oilman Magazine / September-October 2020 / OilmanMagazine.com26OILMAN COLUMNCOVID-19 has undeniably shaken global economies to their very core, and the world has responded by changing at rapid speed. Additionally, the pressure of climate change looming in the background has also become an immediate threat. With these enormous challenges in front of us, it’s understandable to feel powerless.I left the energy sector and joined the AI space a few years ago as I, too, felt powerless. I felt some of our challenges as a species were insurmountable without AI helping us. How can one person, or even a team of people, possibly understand something as complex as climate change, and all its interconnected causes and effects?Having joined the AI space, focusing on energy, I spend a lot of time with governments, energy companies and the general public, discussing energy. One topic keeps coming into focus as top of everyone’s agenda – that of decarbonizing oil companies. People feel that change will take decades (understandably aggravated by the big oil companies’ multi-decade ambitions), but I feel a large piece of the puzzle is being missed. Namely, the fact that AI, used intelligently by our humble species, can dramatically reduce the time it takes to cut out a lot of carbon from the oil out gas process. Why Oil Companies?Oil companies have been in the spotlight for quite a few years around the huge carbon intensity of their operations. I’d like to demonstrate how all functions within an oil and gas company can use AI to carry out the rapid decarburization that their shareholders and our planet demand. To highlight the importance of this trend, a lot of oil and gas companies have been stating their aims to go carbon neutral by a certain date – see BP’s announcement to be carbon neutral by 2050, Equinor’s commitment to cut emissions in Norway to near zero by 2050, Shell’s aim to become a net zero emissions energy business by 2050, and Total’s announcement that its global VC fund will be pointed toward “fostering carbon neutrality.”This is good as oil companies emit a lot of carbon; BP’s annual emissions being roughly equivalent to the entire country of Australia. In fact, energy companies have emitted the most carbon of any enterprise, government or country ever, and the widely accepted consensus is that this can’t continue for nancial (stranded assets) and moral (less pollution for future generations) reasons. Pressure for energy companies to have low-carbon strategies initially came from student groups and grassroots protests. More recently pressure has come from some of the world’s biggest money managers, such as BlackRock, which owns huge amounts of shares in the supermajors and is, therefore, exposed to the risk this industry faces from a low-carbon future without a valid plan in place. It’s clear that we will have to move away from oil to hit the ambitious emissions targets most major governments have set. This is a huge challenge. Moving from 100 million barrels of oil a day to signicantly less will take a long time as oil is baked into almost every industry on the planet, from transport to plastics to cosmetics to TV screens.Moving away from oil has certainly started. Transport systems are moving relatively quickly toward EVs, and we will eventually nd alternatives to plastics. COVID-19 has also temporarily reduced oil consumption dramatically as most ights globally are grounded, and demand has plummeted as people stay at home and don’t travel. The wider Decarbonizing Oil and Gas Using AI By George Hackford Image courtesy of SparkBeyond

Page 29

Oilman Magazine / September-October 2020 / OilmanMagazine.com27OILMAN COLUMNmove to new cleaner technologies is slow, however, and there is a way to immediately decarbonize the extraction of oil and gas resources using AI, while the larger industry trends toward cleaner technologies take place.What is AI and What Can it Do for my Energy CompanyAI is a meaningless term, as those in the industry come to appreciate. In this series, I’m using this oft-abused term to represent a suite of technologies that can and will make decisions on their own, when used intelligently by a human controller. These technologies include machine learning, deep learning, computer vision, robotic process automation and natural language processing, mostly. McKinsey, as always, does an excellent job of summing up what AI is in this exec read-me. Decarbonizing the end users of the oil and gas companies’ core products (i.e., you and I) is a different story, so I’m going to focus on decarbonizing an oil and gas company’s operations using AI, tackling use cases such as:• Removing the causes for gas aring, a huge CO2 problem• Reducing fuel usage and associated emissions across a shipping eet • Stopping methane leaks in oil and gas pipelines before they happen. In my experience, simply having a good, cross-function data strategy could dramatically reduce emissions. Most major oil companies are fast, deep-pocketed movers in the AI and cloud space, so wider experimentation shouldn’t take too much convincing in the long journey of decarbonization.Over the next few weeks (one article a week), I’ll be detailing how anyone can use AI technology to see a huge decarbonization impact in upstream, midstream and downstream departments of a typical oil and gas major. The rst stop will be a deep-dive into using AI to decarbonize the upstream operations of a typical oil company, then moving midstream, downstream and concluding with a look at the future.George Hackford serves as the lead impact strategist in Energy, Power & Resources at SparkBeyond. He is experienced in setting up successful data science/AI projects and capa-bilities across large organizations. He is particularly interested in AI in the energy and power space, and sees AI adoption as a natural next step for the sector.

Page 30

Oilman Magazine / September-October 2020 / OilmanMagazine.com28OILMAN COLUMNA review of best practices and steps for projects to produce sustainable AI implementations.Articial intelligence (AI) continues to surpass what experts thought was possible. Governments and companies of all industries are pouring billions into implement-ing the tech-nology. In the energy industry, AI has thoroughly permeated the exploration and pro-duction sector. Now it’s popping up in many forms across midstream and downstream as well. The power and complexity of AI lends itself to making AI projects complex as well as different from other IT projects. When getting started with AI, including a dened AI governance and other AI-specic considerations leads to sustained value from the pow-erful technology.It All Starts with AI Project GovernanceAI projects lend themselves to an Agile methodology. Since AI is new to the business world, AI projects are more likely to experience setbacks and course corrections during implementation. Agile minimizes costs of redirection while delivering benet sooner, making Agile a better approach for AI imple-mentation. Effective AI governance also involves choosing your battles wisely. Choose a relatively small and specic business use case to enable and enrich AI at rst, as this reduces risk while allowing the enterprise to prove the business utility of the tool. If you start with an activity that has broad effects across the com-pany, bumps in the road will be more costly and time-con-suming. Win a smaller battle before trying to win the whole war.After you’ve won your rst AI battle, you can begin to leverage the resulting AI solution to solve other business problems. As busi-ness needs evolve, AI governance plays an ongoing role to ensure that AI projects and applica-tions are prioritized effectively and continuously evaluated. When plotting the course for the company’s future with AI, resource constraint and busi-ness benet must be weighed against each other to inform where it is wisest to apply your AI technology next. A good way to accelerate AI adoption through the organization is spreading the word about these projects. If AI successes have been effectively evan-gelized, when company leaders have a potential AI need, they are more likely to think of the project team, generating more work for them.What Skills/Personnel Do You Need?In addition to what IT projects typically include, here are some of the roles that can accelerate an AI project:• Executive Sponsor – An Executive Sponsor provides the funding for the project and maintains alignment with the company strategy. Success-ful AI implementations benet from support from the executive ofce.• Product Owner – The Product Owner is ideally from the business unit instead of the IT group. Busi-ness alignment ensures the products are helpful to the business, and lets the business see where the products can be applied to add value. This prevents solutions from becoming just what IT thinks is the next cool-est toy.• Project Management – Project Management takes the lead on or-ganizing the governance, personnel and requirements. Filling leadership roles with individuals that have ex-perience on AI projects ensures that project decisions and design will be informed by the proper insight.• Data Engineers – Data Engineers will extract and integrate the nec-essary data into the AI platform. Having several data engineers on the project is necessary due to the size and time-consuming nature of the task. • Data Scientists – In an AI project, data scientists develop and train the AI. The algorithms the scientists design are what give AI the ability to “learn,” and to operate with reduced supervision. Data Scientists are usu-ally employed by the provider of the software or by another third party. These key personnel will continue to be important as AI use cases spread throughout the company. Largely the same group should be on each new AI project. From these projects, the participants will pick up skills that other employees won’t have. For this reason, it is most efcient to treat these person-nel as your AI “factory” to be called upon for future projects that apply the use case to other areas.Building Your Sustainable AI Strategy and Implementation By Ian CampbellDesignDevelopmentImplementationAnalysisEvaluation

Page 31

Oilman Magazine / September-October 2020 / OilmanMagazine.com29OILMAN COLUMNHelping Employees Adapt to The New ToolWith any disruptive, technology-driven change comes resistance. Harvard Busi-ness Review cites AI’s lack of transpar-ency, the hype surrounding AI, fear of losing control over work, and the disruption of familiar work patterns as reasons why employees may hesitate to adopt. These impressions leave em-ployees reluctant to fully utilize new AI applications, which subtracts from the value of technology investments.Despite employee discomfort, AI often does not replace jobs, and only makes existing jobs more enjoyable. One com-mon use for AI is to automate tasks that are repetitive, time-consuming, and don’t add value, which leaves the more enjoyable value-added tasks for the humans. Therefore, an AI solution may actually make employees happier once they understand what it does. To move toward this understanding, visual demonstrations of the process an AI app uses has shown to be an effective means of gaining employee trust. Most people are visual learners and, when people understand something, they can begin to trust it.Bringing in External HelpOil and Gas consultants can be a catalyst for organizational improve-ment and innovation, and AI projects are no exception. Bringing a blend of energy expertise with technology delivery experience, they can introduce a value-added Project Management capability to lower delivery risks and better ensure successes are delivered early. In addition, energy consultants can be effective change agents, help-ing the organization understand the impact of AI on jobs and harness the power that AI presents. Finally, they can assist the organization with moving beyond project-based governance into a business-led AI governance framework which is essential for sustaining and expanding the benets of AI.Consultants and subject matter experts assist in bridging the gap between soft-ware and client. It isn’t feasible to build AI software in-house, so an existing AI product should be brought in by a software company and customized to meet requirements. However, not all AI software can be customized to t the task or industry as desired. Consultants can leverage their industry experience and technical know-how to help deter-mine the right AI software for the job, and how to customize the software to meet a client’s unique needs. Furthermore, consultants can help pre-pare the client to support the applica-tion in the long term by assisting with data cleansing and data integration, set-ting up ample computing power, help-ing establish controls and compliance methods for AI, training employees to use the AI system, and more. These activities provide the foundation crucial to a sustainable AI solution.TakeawayAI projects are unique and require new approaches and skills. Like all projects, the right governance, leadership and knowledge can unlock enormous value. Contact Opportune today to see how we can help drive your AI implementa-tion journey.This is the nal installment of a three-part series discussing AI’s potential and critical role in oil and gas, how a company can prepare for an AI platform, and important steps to executing a sound AI implementation.Ian Campbell is an intern with Opportune LLP’s Process & Technology group. Currently attending Baylor University, Campbell is pursuing an undergraduate degree in management information systems with a certication in business analytics. Source: MediumADVERTISE WITH US!Are you looking to expand your reach in the oil and gas marketplace? Do you have a product or service that would beneﬁt the industry? If so, we would like to speak with you! We have a creative team that can design your ad! Call us (800) 562-2340 Ex. 1 OilmanMagazine.com/advertise Advertising@OilmanMagazine.com

Page 32

Oilman Magazine / September-October 2020 / OilmanMagazine.com30OILMAN COLUMNThe oil and gas industry has quickly made leaps and bounds in combatting COVID-19, and the offshore sector has been forced to develop creative and innovative tactics in winning the battle. Like the various types of work that make up the shale industry, the offshore world serves as the workplace for many, but is also taxed with having to create a safe living environment in addition to a safe working environment. The once commonplace activity of managing shifts for 24-hour operations and extended schedules has quickly become a logistical nightmare.An incredible amount of time and effort goes into scheduling offshore work and ensuring living space is available, most often described by a term known as “Persons Onboard” or POB. With the current standards and guidelines of social distancing and strict hygiene orders, providing a safe working and living atmosphere has monopolized the attention of many companies. Limiting personnel in living quarters on an offshore facility results in a decreased size in workforce.Headquartered in Louisiana, LLOG Exploration is a deepwater operator in the Gulf of Mexico and has faced the challenges of COVID-19 head on. According to LLOG geologist, Eric Zimmermann, the company’s approach in dealing with the virus originated with adhering to the guidelines authored by federal and state-run organizations and agencies in the know.“LLOG’s course of action is in line with the CDC,” said Zimmermann. “We are also following those guidelines of the Louisiana Department of Health and we’re partnering with our telehealth providers.”Although LLOG is not quarantining workers going to their offshore sites now, it has exhibited ingenuity with the precautions currently in action. Rota-tions known as “hitches” have been extended to decrease the workforce’s exposure to potential outside contami-nation. When maintaining health off-shore, limiting ingress and egress with land is crucial. Keeping the working population isolated allows for the ability to only be concerned with controlling a potential outbreak offshore.“Limiting contact is a huge defense,” said Zimmermann. “We’re prioritizing work to be done. If it can wait, then it is postponed for now. We are also conducting a screening process of checking temperatures and if any COVID symptoms are presenting themselves.”Other companies offshore have adopted this postponement of work practice and while it is agreed necessary, it has wreaked nancial havoc on some service providers in the industry. Coupled with the decline in oil prices, the pandemic has greatly affected the nancial bottom line of many.“We have seen a signicant decrease in earnings,” said Mike Bethea, CEO of Offshore Technical Compliance LLC, an offshore service provider.The COVID-19 pandemic is widely considered a uid situation and information is continually changing. Zimmermann said LLOG conducts bi-weekly meetings dedicated to steering the company’s response.“The pandemic is dynamic and a top concern for us.” said Zimmermann.Offshore service providers have also had to develop their own COVID-19 action plans to protect their employees, but also due to the requirements implemented by companies like LLOG. These partnerships have not only increased awareness, but they have also Deepwater Manages Pandemic on Land and at Sea By Nick VaccaroLLOG Who Dat Production Facility. Photo courtesy of LLOG Exploration

Page 33

Page 34

Oilman Magazine / September-October 2020 / OilmanMagazine.com32Although most of these new proce-dures and policies are costly, deepwater companies are not shying away from providing them. Zimmermann stated that LLOG is committed to medivac quickly, if needed, to remove work-ers from a facility should they display COVID-19 symptoms.In addition to the new and challenging logistics of working offshore, the customers and contractors share another issue. Both have employee teams that reside on land and support their offshore activity. They are, therefore, tasked with ensuring safe working environments in their own ofces as well as for those working offshore. “Our ofce is on a platoon system and we are staggering work times,” said Zimmermann. “We have instituted a no-touch policy and we have a team that cleans our facility daily. Masks are also required in all communal areas of our ofces.”Bethea stated his company’s ofce response is in line with agency regulations. Staff is limited to no more than ten people in the ofce at a given time and must practice social distancing. Staff members who are not in the ofce have the capability to work from home.“Our employees are required to wear masks when entering our building, but can take them off when they reach their individual ofce spaces,” said Bethea. “If a person does not feel well, we want them to stay home.”Bethea feels Offshore Technical Compliance’s vigilance has played an important factor in why it has experienced no cases of COVID-19 on a company level. Disinfecting protocols have been instituted in its ofces with a professional service cleaning the facility twice a week. Food must be closed and sealed, and hand sanitizer stations have been staged at commonly touched surfaces. Ofce personnel have also been tasked with cleaning and wiping surfaces in their personal workspaces.Because COVID-19 directly affects all aspects of business, offshore compa-nies have been forced to change their thinking and how they can adapt to the new normal. Task forces and special committees are being devised to meet business needs. Zimmermann indicat-ed that LLOG’s HSE staff is leading its offshore efforts and staying educat-ed with the virus’ changing effects.Bethea said that Offshore Technical Compliance’s management team is monitoring its response globally as services are provided on an international level. He explained that it is challenging because, in addition to the federal and state guidelines revolving around COVID-19, the company must also follow the guidelines of other countries where its services are provided.“We have a relationship with a management company in Mexico that helps us over there,” said Bethea. “That company is bilingual.”Considering that, as of this writing, the U.S. appears to be witnessing an increase in COVID-19 positive cases, many offshore companies have been looking to the future and attempting to establish protocols to deal with the pandemic for an extended period. According to Zimmermann, LLOG is meeting regularly to examine information and plan for potential strategies needed for the company to coexist with the virus.Bethea said that Offshore Technical Compliance is relying on innovation to shape any needed strategies. The company is investigating bundling services to be competitive and is focusing on global markets where it is not as simple to cease work.Speculation over how conducting business may be forever altered after COVID-19 has run its course has plagued the offshore industry. With reports of increased numbers in positive cases, as well as the possibility of vaccines on the horizon, one question is continually repeated: Will the pandemic leave behind lasting effects that will permanently change the business models of offshore companies around the globe?“It is a little early to tell what the post-COVID world will look like, but we have aggressively acted to get our digital communications platforms to a high level,” said Zimmermann. “This utility will certainly be a centerpiece to how we do our business in the future.”Zimmermann added that many adjustments will be made and that teleconferencing has been invaluable. He indicated that the capability to share a screen has been a very useful feature during those teleconferences. He also said he envisions corporate travel being streamlined.According to Bethea, he sees many tactics remaining in the workplace. Practices such as distancing when pos-sible and hand washing should be re-maining in use as needed. He feels the pandemic has revolutionized how the world uses the telephone and foresees video conferencing being the primary form of communication. He is also convinced that remote working will be regularly instituted in the workplace.“One thing we have learned from this pandemic is to be exible,” said Bethea. “We will be better prepared in the future.”Nick Vaccaro is a freelance writer and photographer. In addition to providing technical writing services, he is an HSE consultant in the oil and gas industry with eight years of experience. Vaccaro also contributes to SHALE Oil and Gas Business Magazine, Louisiana Sportsman Magazine, and follows and photographs American Kennel Club eld and herding trials. He has a BA in photojournalism from Loyola University and resides in the New Orleans area. Vaccaro can be reached at 985-966-0957 or navaccaro@outlook.com. OILMAN COLUMN

Page 35

Page 36

Oilman Magazine / September-October 2020 / OilmanMagazine.com34OILMAN COLUMNOngoing chemical treatments are among the top production costs in almost every basin, coming in at around eight to ten percent on average on the low end. As oil prices whipsaw across the line between prot and loss, producers are looking for ways to manage every possible cost, including chemicals.For efciency’s sake, most operators rely on the expertise of the chemical provider to assess the mix and dosage of chemicals to protect equipment from scale, corrosion, parafn and other elements that can interrupt production and create signicant replacement costs. In evaluating costs, operators lack the time and chemical suppliers lack the incentive to determine dosage efciency as long as the treatment is basically working. The assumption has been, “It’s working, so we must be doing it right.”A series of discoveries in the remote oil elds of Montana led to the develop-ment of a tool that could signicantly reduce chemical requirements through better blending of those chemicals with the production stream.First Discovery: Injected Chemicals can be Less Effective A 2005 inspection of tubing being removed from a Montana well during an electric submersible pump (ESP) replacement offered a major revelation. As the North-Pole-frigid December morning air met the tubing, globs of a gooey, scaly substance were evident with the top 20-30 joints of tubing, globs that quickly peeled off onto the ground. Subsequent testing showed this to include some scale, but to mostly consist of the concentrated treatment chemicals. Anecdotally, other workover crews have reported seeing this kind of mass on ESPs where chemical is ushed down the casing. This epiphany was huge. It meant a large percentage of the chemicals never reached the downhole equipment they were intended to protect. That eld was dotted with stripper wells, whose water cut reached as high as 98 percent, producing 500-4,000 barrels a day. In that environment, pump replacements costing $75-$125,000 coming at about three-and-a-half year intervals often mangled prots for this operator and others.Most of the larger chemical suppliers had left the area 20 years earlier due to falling demand for their products as a result of shrinking production. A small local provider, N-Run, founded in 1999, was behind the discovery of unmixed chemicals on the tubing. The solution appeared to involve the insertion of an in-line static mixer into the sidestream ow at the point of chemical injection just prior to discharge into the casing, before dropping to the uid level. This mixer would cause mass transfer, as calculated by the Reynolds number (Re), creating uid turbulence in the pipe. The resulting turbulence would induce a mixing action, much like a spoon blending the ingredients of a cake recipe. It would transfer chemical mass into the uid mass. Other industries have long used static mixers to reduce chemical consumption, so it seemed logical to apply it to oil and gas.Depending on the well and the chemi-cal design, that uid mass could be single phase—oil alone with a trace of produced water—or it could be three-phase, consisting of gassy uids with a 50 percent water/oil mix. Increasing the contact capacity of the treatment chemical with the uid itself is clearly the most fundamental factor in improv-ing the chemical’s performance.To create and test such a mixer, Tellerus Patented Chemical Mixing Tool Improves Results While Slashing Chemical Spending By Paul TarmannThis challenging installation in the southern ank of the Williston Basin was using 10.5 qt/day of emulsion breaker to treat 18 gravity tight emulsion at 55˚F Red River crude. It produces 220 barrels of uid daily at a 60-40 oil/water ration. Over a ve-year period, several chemical providers tried repeatedly to nd a more effective and economical mix. Within 90 days of installing the inline mixer, chemical usage was reduced to 4.5 qt/day, saving the producer $14,147 per year in chemical costs.

Page 37

Page 38

Oilman Magazine / September-October 2020 / OilmanMagazine.com36producers who prefer them to threaded joints for pressures above 125 psi. Units are available in lengths of two to eight feet. The mixing stack inside the tool housing does create a small amount of back pressure (eight to ten percent) due to bafes in the static mixer, but eld trials have shown this to be more than overcome by the improved performance achieved through better mixing of chemicals.Field Trials for Phase OneField tests initiated in 2008 involved installing static mixers in the treatment sidestream ow of several wells whose ESPs failed at the previously stated three-and-a-half year intervals, in spite of extensive uses of scale and corro-sion inhibitors. As of this writing, the wells with mixers installed at that time are still in service 12 years later. In another eld trial, the mixers were installed on several leases using emulsion breakers to treat owlines at the surface. Here the improved mixing of chemicals resulted in a 35 percent drop in owline pressure (from 150-175 psi to 110 psi), which helped boost production by six barrels per day.Discovery Two: Complete Mixing Requires Less Chemical VolumeEarly phase testing made no adjust-ment in the amount of chemicals injected. During the downturn of 2015, however, clients began looking for ways to reduce costs, and chemical injection rates were on that list. They asked Tellerus to experiment with lessening scale and corrosion-reducing chemicals and monitoring the results. The goal for the operators in question was to cut chemical costs by 40 to 50 percent. Field Results for Discovery TwoThe trial reduced injection rates to approximately 60 percent of previ-ous levels while continuing to use the same chemicals. At this writing, ve years later, there have been no observed increases with corrosion or scale since making that change.Another test involved an emulsion breaker application used to separate heavy black oil (18° API), cold (55°F). This improved predictable oil delivery to the sales tanks while reducing chemical demand by 40 to 80 percent.For a trial in Wyoming’s Big Horn Ba-sin, a major operator installed several mixers with the goal of improving the chemical performance on multiple leases. Treatments included reverse breakers and water clarifying polymers. The company had existing surface discharge permits that required sig-nicant tank room and large settling ponds in order to achieve permitted water quality.The Tellerus mixers installed in the trial improved oil/water separation with a 400 percent reduction in oil carryover. Tellerus then expanded that trial to other types of treatment, including multifunction inhibitors, with similar results.Winning CombinationNumerous users have observed that this is a seemingly simple solution, but its results are profound. Most units pay for themselves in a few months, even on stripper wells like the ones in Montana. Field trials have shown that the greater blending of chemicals with the liquid have greatly enhanced the effectiveness of those chemicals. Effectiveness improves to the extent that the amount of chemicals required can be reduced by 40 to 80 percent in most cases.The patented static mixer design was among the nalists for the 2019 Na-tional Association of Corrosion Engi-neers (NACE) Corrosion Innovation Award international competition. It is also under consideration for adoption by the technology wing of a superma-jor oil company. The Reynolds effect is valid at any ow rate achievable in the oil patch. It is clear that this solu-tion is not just for small wells; larger wells stand to benet even more from this tool.Paul Tarmann is founder and CEO of both N-Run and Tellerus Corporation. He has 38 years of experience in upstream oil and gas production chemicals, working with a broad range of applications common to all basins worldwide. Tarmann is a member of the National Association of Corrosion Engineers and also a lifelong member of the Society of Petroleum Engineers. The Tellerus website is www.tellerus.com. OILMAN COLUMN112288444433444444$$7777..5522$$5511..6688$$2255..8822$$2255..8822$$1199..3366$$2255..8822$$2255..8822$$2255..8822118800116622115577115522116644115500115588114499NNoovv--1177JJaann--1188MMaarr--1188AAuugg--1188DDeecc--1188JJuunn--1199NNoovv--1199MMaayy--2200EEMMUULLSSIIOONN BBRREEAAKKEERR PPEERRFFOORRMMAANNCCEE 22001177--22002200 MMIIXXEERR MMOODDEELL HHVV44Chem Use Rate Qt/d Chem Cost $ per day Flow Line Pressure

Page 39

Oilman Magazine / September-October 2020 / OilmanMagazine.com37OILMAN COLUMNA 3D Digital Twin is a virtual replica of assets, consisting of “point cloud” data captured by Light Detection and Ranging (LIDAR) scanners, which is used to update Piping and Instrumen-tation Diagrams (P&IDs). This data is connected to a plot plan and users can navigate between the three (plot plan, point cloud and P&IDs) to per-form a virtual walkthrough of a facil-ity, where the data mentioned above has been curated and made accessible in the Cloud via a web browser. A 3D Digital Twin can be useful for buyers, sellers and due diligence service pro-viders of industrial, above-ground as-sets with some degree of mechanical complexity in the oil and gas, process, mining and manufacturing industries.The benets of a 3D Digital Twin include:• Overcomes issue of outdated engineering drawings pushed to the VDR, spurning questions regarding as-built status.• Provides users with richly detailed asset virtual reality and browser-based access to perform a virtual asset walkthrough.• Reduces Q&A about as-built status of the assets since P&IDs are updated and accurate, reducing time to complete due diligence.• A viable and timely alternative to physical inspection of assets.• Provides seller with a marketing tool to showcase the assets with guarantees of accuracy and reduced buyer remorse.• Supports due diligence profession-als (including SMEs, valuation, and Representation and Warranty policy underwriters) with more accurate and comprehensive data describing the assets, resulting in shorter time frames to complete due diligence. • Overcomes travel restrictions to inspect assets.• Web and cloud-based, providing ease of access with no software to download and install.• Provides a longer-term foundation for digital transformation, including risk-based inspection and predictive maintenance, and subsequent addition of 3D modeling of corrosion loops.• Supports regulatory compliance where inspectors and auditors require conrmation of assets and changes over time to correct deciencies.Situation and ProblemA midstream operator decides to sell certain assets in its portfolio, including a 200MMcfd natural gas processing plant and compression facility. Both facilities are over 10 years old and have undergone various engineering changes and modications during their lives, including the replacement of certain equipment and conguration changes in piping, controls and other instrumentation. Both are subject to the recently enacted DOT/PHMSA Megarule requiring operators to have updated as-built documentation of affected assets, as well as OSHA process safety management for certain assets. No updates to P&IDs have been Using 3D Digital Twins to support Mergers and Acquisitions Due Diligence for Industrial Assets and Facilities By Brent StanleyPhoto courtesy of mCloudContinued on next page...

Page 40

Page 41

Oilman Magazine / September-October 2020 / OilmanMagazine.com39OILMAN COLUMNupon receiving the LIDAR data, updated the P&IDs to reect as-builts and made them intelligent (auto-recognition of equipment, instrumentation and piping circuits, materials data and specications as was present on the P&IDs).4. The resultant Digital Twin was uploaded to the cloud and credentials created for users to access through a web browser.5. Entire process, Steps 1- 4, was completed in xx weeks.Buyers and Due Diligence Professionals Perform Virtual Review The seller exports updated P&IDs as pdf les with CAD layers from the 3D repository and pushes these les to the VDR. Seller also provides a link and credentials to buyers and due diligence professionals to access the 3D repository. Buy-side is now guaranteed accurate data as well as the ability to perform a virtual inspection of the facility, with the ability to navigate between a plot plan, 3D of the assets, and the intelligent P&IDs. In addition, seller allows the 3D data to be used by buyer Representation and Warranty insurer underwriters, accelerating the issuance of a policy, which allows the seller to pocket a percentage of the deal which would otherwise be tied up in escrow for several years.In this case, the use of a 3D Digital Twin provided the following benets:ConclusionUsing 3D Digital Twins to support, M&A due diligence is a novel solution which benets sellers and their ability to move ahead of competing assets which do not leverage this solution. Buyers likewise benet from increased condence of understanding what they are acquiring. For M&A activity where there are above-ground assets of some mechanical complexity, using a 3D Digital Twin increases transparency of what is being sold, providing guaranteed accurate data with the ability to perform remote inspection of the assets. Improving deal velocity is the ultimate benet.Brent Stanley is the VP business development, Connected Industries for mCloud, and has degrees in mechanical engineering, math and physics from Case Western Reserve University. He has spent the last 20 years implementing digital transformation projects for Fortune 500 and industrial companies, including oil and gas and process industries. Stanley is a subject matter expert in adoption of 3D Digital Twin solutions to support mechanical integrity and RBI initiatives and has worked closely with industry participants to achieve regulatory compliance for the operation of assets affected by PHMSA, OSHA and other regulatory bodies. ADVERTISE WITH US!Are you looking to expand your reach in the oil and gas marketplace? Do you have a product or service that would beneﬁt the industry? If so, we would like to speak with you! We have a creative team that can design your ad! Call us (800) 562-2340 Ex. 1 OilmanMagazine.com/advertise Advertising@OilmanMagazine.com

Page 42

Oilman Magazine / September-October 2020 / OilmanMagazine.com40OILMAN COLUMNWell drilling, the second step in the downhole process, begins when the su-percial casing is put in place and ends when the well is set to begin the hydro-carbon production. It is commonly the process of greatest investment; for this reason, it is the main gauge when study-ing new projects.Because of what drilling means for the investment of the project, all the operational problems that generate loss of time are taken into account. When this NPT (Non-Productive Time) is taken into account in the wells in the Gulf of Mexico, the study outlined in “New Drilling Optimization Technolo-gies Make Drilling More Efcient” by D.C-K. Chen revealed that 25 percent of lost time is NPT, translating to $1.5 million per well. According to Chen, operational problems such as loss of circulation, variations of the EDC, pipe clamps or problems related to borehole cleaning, among others, are problems that go hand in hand with borehole stability, and he explains that the best way to deal with these difculties is with the con-tinuous use of new tools and techniques for drilling. Understanding the needs of the market, the drilling process has been perfected over time, so have the special tools for projects and the use of new techniques to meet the different operating needs of the formations, in order to create a solution for each problem, or a single solution for several problems. Tools Used in DrillingThe tools used for drilling consist basi-cally of the drilling rig; this element has different versions that have been born over time, in order to reach new levels.The drilling rig is an element composed of elements such as crown block, der-rick, traveling block, swivel, standpipe, Kelly, rotary drive, draw works, engines, blowout prevention equipment, mud pump and mud pit. On surfaces and in the subsoil, it consists of drill pipe, casing, cement and drill bit. This is the basic conguration of a drilling rig; this group of elements represents the four systems that govern drilling.• Lifting system• Rotation system• Circulation system• Power systemIts mission is to ensure a surface/reser-voir connection and thus transport u-ids trapped in the subsoil. Although it is easier said than done, an easy goal does not always exist, so there are different alternatives for different challenges: • Percussion drilling: When there are wells to be built at depths not greater than 30 meters, this type of method is most often used, as it works for unconsolidated formations. The rst of the drilling methods used, it was based on employing a hard and heavy bar that had a drill bit at the tip, which collided against the soil repeatedly, shrinking the gravel with the help of a bailer. The structure is a tripod that supports the weight and the drilling process was done by using cables. To maintain the stability of the borehole, a casing was used that prevented it from collapsing and, at the same time, isolated the proce-dure. This method is still applied in Australia. • Rotary drilling: With the passage of time, research offered new opportu-nities to exploit oil, but meant drilling to greater depths. Due to this, one of the most common forms of drilling in the world was born. Originally built for wells of more than 3,000 feet of depth, over time it varied to what it is today. The equipment consists of a tower of about 40 me-ters which supports the equipment Drilling Tools Most Used and Techniques to Exploit Formation Conditions By Raul PalenciaDrilling equipment and technique. Photo courtesy of Liebherr

Page 43

Oilman Magazine / September-October 2020 / OilmanMagazine.com41OILMAN COLUMNconguration, and contains a motor that, along with the rotary table, is in charge of generating the drilling, the drill bit being responsible for destroy-ing everything in its way. The uid control equipment is responsible for raising the gravel to the surface and maintaining the pressure differential in equilibrium. In turn, it is con-nected to the system, thus preventing blow-outs, being able to send a line of uid pressure to counteract the pressure of the formation, if neces-sary. Capable of working in any type of formation by modifying certain elements and, with a speed of 40 to 250 rpm, this drilling rig has been on the market for over 50 years. Drilling RigsDrilling rigs were born from the idea of making direct drilling on the sea-bed. The reason? Geological studies showed large reservoirs established in the sea and the best way to take advan-tage of them was with the use of boats equipped to move the drilling rigs and to be autonomous in order to perform the whole process.The common operation of this type of drilling is using a rotary table, and over time different drilling rigs were devel-oped, such as: • Drillship• Semi-submersible platform• Self-elevating platform• Fixed platformIn the beginning, they consisted of necessary equipment to fulll tasks; today, they have comfortable facilities to accommodate professionals. Directional DrillingDirectional drilling rigs are a necessary variation born from the common rotary table rigs, there are different congura-tions, but they are based on the use of a bottom motor that is responsible for controlling the direction of the drill bit, from the surface the position of the drill and its degrees of inclination is controlled, either with a manual or digital system.This drilling rig was born in view of the need to create oriented wells; in turn, it has the ability to create several wellbores Percusion drilling. Photo courtesy of Dando Drilling & Prospecting InternationalDrilling rig. Photo courtesy of Energy World Rotary drilling. Photo courtesy of Fundamentals of Onshore DrillingContinued on next page...

Page 44

Oilman Magazine / September-October 2020 / OilmanMagazine.com42OILMAN COLUMNfrom the same location on the surface, providing low costs and solutions to geological problems. It is used globally and companies such as Halliburton or Schlumberger, among others, use this technique in marine stations, managing to exploit the reservoirs optimally. Electro DrillingThis type of drilling is similar to ro-tary drilling but, unlike being driven by combustion engines, electro drilling is driven by electric motors. This impor-tant difference includes the change in the type of control to the drilling, the rotor that drives the movement of the drill bit is close to it, being only a few tubes above it. Currently used in Nordic and Asian countries, it provides the benets of a hydraulic drilling rig and is applicable in high pressure, high temperature (HPHT) conditions. The biggest draw-back of this drilling rig is its mainte-nance but, despite this, it is an optimal option for new elds. Drilling TechniquesDrilling techniques vary according to the type of challenge faced. The correct choice of drilling rig, drill bit, location and other factors is only the rst part of the job. With the knowledge of the conditions of the formation comes a critical decision: drilling under balance or over balance. Drilling Over Balance This drilling technique is the most used in the world. With the use of drilling uids of optimal features, it tries to increase the hydrostatic pressure that causes the liquid column on the side-walls to overcome by a margin of 15 percent or more, ensuring that the uids found in the different formations that are drilled stay in their place and do not enter the well. Commonly used to prevent bursts in areas of over formation pressure, and when the conditions of the formation are not fully known, this type of tech-nique creates larger whitewash on the sidewalls, making the area cleaning do-overs more concurrent, and also mak-ing it more difcult to lift the gravel to the surface resulting in longer operating times. It is used in all types of forma-tions from extra hard to soft, and it is very common for drilling mud to enter the washed area of the target reservoir. Drilling Under BalanceMainly used in consolidated formations, the drilling under balance technique consists of employing a hydrostatic pressure similar to or less than the one offered by the formation. The least amount of pressure is used where there is a functional balance in which the sidewalls maintain the balance and where the formation uids do not enter the wellbore. For the use of this method, it is neces-sary to have a complete knowledge of the formation, especially of the be-havior of the shale, since these are the ones that normally represent the zones of over pressure. When a balance is achieved, the expenses of densifying material decrease, the creation of very thick seals on the sidewalls is avoided, which prevents operational problems such as pipe pegs, area cleaning do-overs and creation of caves, among others. This translates into saving time, which in turn is the direct denition of saving money. It is not common to use this technique for the construction of oil wells, due to the margin of risk faced by the work team, but it is very common to use it to drill the target area. With the use of RFT or MDT equipment to calculate pore pressure, the response pressure of the reservoir is known. This facilitates Directional drilling. Image courtesy of Maxon GroupOver and under balance. Image courtesy of Andres Ocando

Page 45

Oilman Magazine / September-October 2020 / OilmanMagazine.com43OILMAN COLUMNthe task of cannonade and helps expo-nentially to handle a low skin factor. Drilling is a task that, despite main-taining its original essence of using a drilling rig to break the balance of the subsoil, has found itself obliged to evolve over the years to provide an answer to the different challenges faced by the industry, as it seems, the industry will not cease to have new obstacles and the engineer surely will not cease to have new answers. Raul Palencia is an engi-neer and researcher with more than 10 years of experience as a geolo-gist. He graduated from the prestigious University of Andes (ULA), later he received a master’s degree in Reservoir Engineering at the Venezuela Hydrocarbons Univer-sity. During his career development, he worked for oil companies in posi-tions such as: eld geologist, reservoir engineer and reservoir simulation. He has worked in Argentina, Ecuador, Mexico and Venezuela. He currently resides in Texas. A recent report by the International Energy Agency (IEA) entitled “Gas 2020: Analyzing the Impact of the COVID-19 Pandemic on Global Natural Gas Markets” was published in June 2020. The lengthy report emphasizes supply, demand and trade, and, in part, states: “After a four percent drop in 2020, natural gas demand is expected to progressively recover in 2021 as consumption returns close to its pre-crisis level in mature markets, while emerging markets benet from economic rebound and lower natural gas prices. The impact of the 2020 crisis is, however, expected to have repercussions on the medium-term growth potential, resulting in about 75 bcm of lost growth over the forecast period, 2019 to 2025. This forecast expects an average growth rate of 1.5 percent per year during this period.The Asia Pacic region accounts for over half of incremental global gas consumption in the coming years, driven principally by the development of gas in China and India. While the prospects of natural gas remain strong for these two markets, the outlook is highly dependent on China and India’s future policy direction and recovery path in the post-crisis environment. In spite of the current economic headwinds and uncertainty, natural gas still benets from strong policy support in both countries, with ongoing reforms to increase the role of gas in the energy mix. Future growth in the industry sector, which constitutes the main driver of incremental gas demand in both countries will, however, highly depend on the pace of economic recovery, both for domestic and export markets for industrial goods.” In a time of uncertainty, it is certain that natural gas will be of utmost importance in the near future. Liquied natural gas (LNG) will be key in the global energy recovery; however, geopolitics, infrastructure development, regulatory policies and investment will be very challenging. Academy award-winning producer, Gray Frederickson, Mei Li Hefner and I served as producers of the documentary lm The Grand Energy Transition (The GET), released in 2012. It is based on the book of the same name by Robert A. Hefner, III, founder and owner of GHK Exploration, who pioneered deep and ultra-deep natural gas exploration, primarily in western Oklahoma. In the book, which Ted Turner deemed important enough to buy for members of Congress and Fortune CEOs, Hefner forecasts the continuing decline of coal and oil, and predicts the coming “age of energy gases.” America’s abundant natural gas will serve as the major bridge to this new energy age, along with wind and solar power, to create a new, hydrogen-based economy. Natural gas is an energy answer that is available today. We denitely should be putting it to use now. For years I have voiced my belief that natural gas reserves are critical to a strong U.S. economy and extremely important for America’s energy security. Natural gas is an abundant, clean fuel that has many domestic uses, from heating our homes to serving as an alternative to gasoline. It is the bridge fuel to our country’s energy sustainability. Future generations are depending on us to keep the American dream alive. Natural Gas: Beyond the Pandemic By Mark A. StansberryMark A. Stansberry

Page 46

Oilman Magazine / September-October 2020 / OilmanMagazine.com44OILMAN COLUMNEnvironments in oil and gas wells are harsh, complex and abrasive, wreaking havoc on drilling systems and equip-ment, which are especially difcult to replace or repair when in boreholes miles underground. For manufactur-ers in this space, industrial 3D print-ing, known as additive manufacturing (AM), has been a game-changer. AM technologies showed early success in the oil and gas industry by producing plastic components, but they lacked durability for all drilling applications. Today, with AM’s advancements, specically printing durable metals like (stainless) steels, nickel alloys and copper alloys, enables companies to design products meant for extremely challenging drilling tactics and complex geometries. And the industry is taking notice. Major industry players, like BP, Shell and Total have begun establishing Joint Innovation Projects (JIPs) to develop guidelines and economic models for using AM in the oil and gas industry. In fact, it’s estimated that within the next ve years, 3D printing in the oil and gas market will be worth $32 billion. By 2030, it’s expected to be worth over $60 billion. Benets of Industrial 3D Printing It’s no surprise the AM market is anticipated to boom within a decade; it just makes business sense. For manu-facturers supplying and servicing the oil and gas industry, AM helps validate designs faster and reduces time to production. AM produced applications are often more durable compared to their traditionally produced counter-parts, allowing for complicated features like a variety of lattice structures and thin but durable webbing or complex channels which can increase the per-formance of applications such as drills, injection nozzles for gas turbines and even turbine blades. In fact, according to Siemens, “If you can 3D print a tur-bine blade, you can print pretty much everything.”Reduced costs and time to market aren’t just appealing to manufacturers. Customers also benet from increased drill accuracy, reduced drilling times, and fewer maintenance disruptions through smart and hybrid AM repair models. If we look at the supply chain aspect of AM, distributed manufacturing con-cepts with digital inventory also create tremendous benets for CAPEX heavy industries such as oil and gas. Simply put: 3D printing on-demand. Because there is a lot of maintenance in the eld, organizations only have two choices – on-site warehousing, which leads to large amounts of working capital, or fast supply, which creates high transport costs, especially in far-ung locations, like North Dakota or on a rig.Common ChallengesThough the benets are clear, as AM continues to grow in the industry, many businesses aren’t making it be-yond pilot mode. Although every orga-nization has a unique implementation journey, when we look at companies who have struggled with AM, there are many similarities. Namely, bringing on AM is a change strategy, just like when you implement any other novel technology. And, like with any digital transformation, it involves rethinking your design processes, your manufac-turing philosophy, and your value and supply chains – a process that’s easier said than done.Let’s back up for a second and revisit this idea of optimizing value chains through AM.The “manufacturing” part of “additive manufacturing” refers to the full end-to-end manufacturing process journey, involving a large number 3D Printing Readiness: How to Get Setup for Success By Fabian AlefeldPhoto courtesy of EOS

Page 47

Oilman Magazine / September-October 2020 / OilmanMagazine.com45OILMAN COLUMNof people, processes, and decisions. This is known as the value chain – the entire universe of people, processes, and organizational infrastructure that goes into the process of creating and delivering goods, starting within research and development (R&D) through production all the way through to marketing and aftersales.The AM process is similar to traditional manufacturing, which has a complex value chain in itself:• The efforts begin well before and extend well beyond production.• You need experts within your orga-nization to identify where and when AM makes sense.• You need technical specialists to dene product specications.• You need designers and engineers to ensure that your products meet those specications.• You need experts to explore and validate the materials that can be used.• And of course, you need to dene and rene the manufacturing pro-cesses to make it happen.So, imagine what it takes to transform, improve and optimize every link in that chain. That’s what’s involved in successful AM implementation.Steps to Ensure Your Company is AM ReadyOvercoming challenges, putting them into perspective, and seeing them as “growing pains” are all part of ensuring your organization is in the right place to succeed. There are a few critical components to keep in mind in this vein as you begin your AM journey.1. Start with the end in mindHere’s the good news: The rst and most crucial step in any AM journey doesn’t involve costly investments in technology at all. It involves looking inward at your organization and dening your challenge and desired end goals. Part of this includes identifying where you’ll need new knowledge and expertise. No one knows what form 3D printing will take in the beginning. That’s the point of starting with your long-term strategy and determining the smaller, more incremental objectives that will help get you there. 2. Rethink how you think of innovationBy beginning the process now, you’re putting the organization in a better place to explore AM at scale. While your rst steps may be modest, they’ll work toward more signicant 3D print-ing strategies. AM is an agile technol-ogy. It’s not just a small project that starts with one person or application and scales up. It’s built to move quickly and scale rapidly throughout your or-ganization. With industrial 3D printing, you can build parts overnight and take them through multiple iterations. This process works best if your company is set up to be an agile organization.Currently, many companies still innovate in waterfall structures. There’s a very linear approach with waterfall methodologies that follows a dene, design, develop, test and implementation process. On the other hand, agile models develop in circular spurts and close to the customer in quick iterations. Coupled with 3D printing, agile is the only way you can increase knowledge throughout your value chain and make sure the journey is clear to all related functions.3. A single “AM team” isn’t the best approachAs you can see, industrial 3D printing is an entirely different way of thinking. This means creating agile teams that aren’t bound by traditional methods and setting up your organization so you’re optimizing that approach. Ideally, you’ll need people from all parts of your business with in-depth knowledge of 3D printing who can also work together uidly. Something that works well in this regard is the “Team of Teams” approach.Popular in the software development space, “Team of Teams” means people can still operate in their current hierar-chical structure. At the same time, they can also form teams cross-functionally by not taking any existing hierarchy or function into account. In this approach, it’s not unusual for a member of the ex-ecutive team to be on another team in a non-leadership role. Instead, they might be led by a lower-level leader (making executive buy-in and support that much more important). Agile team setups create an open work environment. They provide opportu-nities to pull people in as needed to make sure you have all of the necessary expertise on a particular project.4. Your AM journey will be like no otherRemember, industrial 3D printing isn’t as easy as turning on a printer. It requires extensive prep work and buy-in from all levels of your organization. And even if your competitors are already using 3D printing for similar applications, how you use AM can (and should) be sculpted to your specic needs.There will be failures and challenges. But if you let your in-house knowledge and business objectives dene how you deploy additive manufacturing throughout your organization, then you’re ready and primed for success. Fabian Alefeld is the North American man-ager for EOS’s Addi-tive Minds consulting practice, which works with organizations across a variety of industries to maximize their efforts at every stage of the AM journey from start to part. For more information, visit www.eos.info. In May 2020, AMCM, an EOS Group company, announced its AMCM M 4k-1 (single laser) and AMCM M 4k-4 (four laser) industrial DMLS metal 3D printing platforms, which offer high-perfor-mance, customizable platforms ideal for oil and gas applications.

Page 48

Oilman Magazine / September-October 2020 / OilmanMagazine.com46OILMAN COLUMNThe decrease in oil demand as a result of the COVID-19 pandemic, along with the worldwide pendulum of supply and demand, has put many energy companies in nancially difcult positions, including evaluations of operating efciencies of their overhead and capital development projects, as well as constraints on cash ow and liquidity concerns with credit facilities or other sources of nancing. Accounting for the nancial reporting effects of these events and circumstances should be considered whether reporting on quarterly results or evaluating year-end nancial statements.When the pandemic rst began shaking up the global economy, many public companies had limited information to quantify the nancial impact on their operations, either through quarterly reporting or annual reporting. Now that the dust has begun to settle and prices are showing signs of stabilization, albeit at depressed levels, energy companies need to continue to evaluate the longer-term impact of lower commodity pricing environments and the impact of nancial reporting. For energy companies preparing quarterly nancial reports or considerations for year-end reporting, here are some areas to consider:Impairment and Recoverability of AssetsWhen evaluating oil and gas assets for impairment, management needs to consider whether circumstances related to the lower priced commodity environment represent indicators that an asset may be impaired. Evaluating oil and gas assets for impairment falls under ASC 360-10-35 (Reg S-X 4-10 for full cost method companies), which includes proved properties, equipment, facilities and would include any midstream operations such as processing plants, pipelines or related facilities. Unproved properties are evaluated for impairment under ASC 932-360-35. Proved PropertyThe rst step for evaluating impairment is whether any events or changes in circumstances indicate the assets carrying amount my not be recoverable. Such events or changes may include change in regulation, revisions to reserve estimates, and lower than expected commodity pricing, among others. Successful Efforts MethodUnder this method, impairment is evaluated by eld rst by estimating the undiscounted pretax projected cash ows, and risk adjusted probable and possible reserves maybe included in certain situations. Forward strip pricing curves are typically considered, along with management’s best estimates, for evaluating the reserve value. Companies should ensure that any completion or service costs, if they have had any revisions, are included in the net cash ows. If there are any indictors in which the asset’s carrying amount exceeds the undiscounted cash ows, discounted cash ows are typically used to determine the effect of the impairment charge to adjust the properties to fair value. However, other methods are allowed for management’s determination of fair value. Financial Reporting Impairment Considerations for Oil and Gas Companies in the Low-Price Environment By Matt FederlePhoto courtesy of Worksite LTD

Page 49

Oilman Magazine / September-October 2020 / OilmanMagazine.com47OILMAN COLUMNFull Cost MethodUnder this method at a high level, impairment is evaluated using the ceiling test approach for reserves at 12-month, rst day of month SEC pricing, discounted at 10%, with the frequency being either on a quarterly or annual basis. With the current pricing model known for the rst six months of 2020, a company would have a reasonable basis to determine whether there is an impairment or to expect an impairment based on the trailing 12-month SEC pricing average, along with expected pricing for the remainder of 2020. Proved undeveloped reserves, under either method, should only be included in reserve reporting for a development plan able to be drilled within ve years, and companies need to consider whether they have the corresponding ability and access to capital to develop and include those proved undeveloped reserves based upon the current economic circumstances. Based on current West Texas Interme-diate (WTI) pricing from January 2020 through June 2020, the SEC 12-month average pricing would be expected to range from ~$35/bbl to ~$40/bbl (considering six months of actual pricing and at futures strip deck prices for the rest of 2020 at $35/bbl and $45/bbl).For natural gas, Henry Hub (HH) pricing from January 2020 through June 2020, the SEC 12-month average pricing would be expected to range from ~$1.7/mmbtu to ~$2.1/mmbtu (considering six months of actual pricing and at futures strip deck prices for the rest of 2020 at $1.6/mmbtu and $2.5/mmbtu).Unproved PropertyUnproved property is required to be tested at least annually for impairment to determine whether the book value is greater than current assessed value either at individual property basis or group basis, and an impairment should be taken. With decreased com-modity pricing and expected delays or reduction in capital development plans, companies need to evaluate whether their unproved property is recoverable. These and other factors should be included in the evaluation of whether the unproved acreage should be impaired:• considerations of lease renewals and extensions • other wells drilled in the corresponding area or on neighboring operators’ leases• economics • considerations of any exploratory drilling in the area• changes in capital deployment plans • the ability of access of capital to develop and extend current leases Midstream and Other ConsiderationsMidstream companies and energy companies that aren’t reserve based follow the guidance in ASC 360-10-35, whereas indicators are evaluated whether or not the asset’s carrying amount may not be recoverable. Companies should evaluate whether the carrying amount of their property, plant and equipment, typically using an undiscounted cash ow model if there are changes in pricing or timing of cash ows, supports the carrying basis of the property as recoverable. Also, energy companies with oil inventories, goodwill, equity method investments, accounts receivable and other intangibles should evaluate whether any indicators resulting from lower commodity prices would indicate an impairment for nancial reporting purposes, in accordance with other corresponding GAAP treatment. ADVERTISE WITH US!Are you looking to expand your reach in the oil and gas marketplace? Do you have a product or service that would beneﬁt the industry? If so, we would like to speak with you! We have a creative team that can design your ad! Call us (800) 562-2340 Ex. 1 OilmanMagazine.com/advertise Advertising@OilmanMagazine.comMatt Federle is a partner, Assurance Services, for Weaver, a national accounting rm. He is a member of the Texas Society of Certied Public Accountants, the American Institute of Certied Public Accountants, the Council of Petroleum Accountants Societies and the Dallas Young Professionals in Energy. Federle can be reached at matt.federle@weaver.com.

Page 50

Oilman Magazine / September-October 2020 / OilmanMagazine.com48OILMAN COLUMNFor years, organizational leaders in dan-gerous industries have searched for ways to improve organizational performance and prevent serious injuries and fatalities (SIFs). This is particularly true for oil and gas companies where the potential for burns, amputations, fractures and other serious incidents are ever-present. In fact, OSHA reports that employees in the oil and gas industry are especially at-risk for experiencing life-altering safety incidents (Soraghan, 2017). What can be done to prevent these SIFs from occurring? Also, how can leaders maintain focus on im-proving safe production culture with tight scal demands and a pandemic?Four Key FundamentalsInvesting time, energy and resourcing to advancing these four factors will pay divi-dends now and in the future.1. Learn from exemplars: Smart leaders study and learn from leadership pioneers. The late Paul O’Neill, former CEO of Alcoa, was a erce advocate of employee safety and took big risks committing to injury prevention. He took the bold step of saying there were no budget constraints for safety at Alcoa, even if that meant lost revenue and an unhappy board of directors. O’Neill famously stated, “I was prepared to accept the consequences of spending whatever it took to become the safest company in the world,” (Lagace, 2002). He told staff that there was no budget cap for safety and that leaders would be red if they talked about the cost of injuries to employees. He didn’t want to send the wrong message that money trumped caring about people. He was also an early proponent of what is now called a “just culture” where incidents were openly analyzed for future preven-tion and employees were not blamed following incidents. He did, however, re leaders who tried to hide injuries. Put-ting people over prots paid off. Injuries dropped 85 percent during his tenure at Alcoa and market value rose from $3 bil-lion to more than $27 billion. Paul O’Neill viewed safety as an investment instead of a cost…as was proven right. Strong leaders improve their own safety leader-ship actions by learning from others who found high levels of success.2. Network with trusted advisors: Smart executives regularly meet with fellow leaders from a variety of different industries. It’s common knowledge that there are no “quick xes” and effective leaders need to seek experiences from oth-ers who’ve managed similar challenges that they’re facing. This networking includes conferences, forums and executive leader-ship groups. These formats allow leaders to share best practices and brainstorm so-lutions to common obstacles leaders face. Strong leaders also get guidance from ad-visory rms and coaches who have years of experience helping companies navigate difculties. These partner organizations help develop customized assessments, roadmaps and innovative programs like human performance or behavioral safety to improve safe production culture. 3. Demonstrate active caring: Innova-tive leaders stress caring and compassion over compliance. Incidents and inju-ries drop as the quality of relationships between leaders and employees improves (Hofmann & Morgeson, 1999). A new plant manager at a still mill in Ohio inher-ited an unhealthy culture with signicant distrust between managers and employees. One of his rst acts as plant manager was to set up 30-minute meetings with every employee in the facility to discuss whatever issues were on their mind (safety or otherwise). He called the meetings “30 minutes with Bob” and promoted them in person, during other meetings, via email and through other communica-tion channels. When we arrived on-site to conduct safety training, a number of employees told us how much they liked the meetings and appreciated his effort. As importantly, numerous employees who’d not had the meeting referenced the meet-ings as an indication the new leader cared about his employees. This simple move sparked a change in the hearts and minds of employees and demonstrated legitimate active caring. Effective leaders embrace the philosophy of coach Lou Holtz who said, “Others don’t care what you know until they know that you care.” 4. Improve eld manager and supervi-sor soft skills: Effective corporate leaders invest in the soft-skills of eld-level man-agers and supervisors. These leaders inter-face directly with employees and set the tone for organizational culture and perfor-mance. Unfortunately, the skills needed to attain these positions aren’t always those needed to effectively lead others. Here are a few guidelines for eld leaders to con-sider when engaging employees in the eld Four Fundamentals to Improve Safe Production in Lean Times By Eric Michrowski and Josh WilliamsPhoto courtesy of Propulo Consulting

Page 51

Oilman Magazine / September-October 2020 / OilmanMagazine.com49OILMAN COLUMN(and virtually during the pandemic): • Show Compassion: Show authentic caring for employees beyond just safety and business requirements. Ask about their well-being beyond physical safety and if there extenuating circumstances to be aware of. Building relationships improves culture in the short-term and pays dividends in the future. • Psychological Safety: Foster an open environment where employees are comfortable raising issues and asking questions. Setting up one-on-one touch-points via phone (or in person) helps establish and maintain good rapport. It also keeps you locked in with any “stucks” employees may have. • Walk the Talk: Emphasize safety as much as production, increase leader-eld engagement, get and use more employee suggestions and feedback, and focus on proactive efforts needed to attain desired results. People that are on the job, doing the job, often have the best understanding of real issues and how to solve them. • Interactive Discussions: Ask open-ended questions to promote in-depth, collaborative discussions. This provides you with an opportunity to update employees on key issues they need to be aware of. It also provides an oppor-tunity to recognize and appreciate their efforts and accomplishments.• Active Listening: Demonstrate effective listening skills. This is more important now than ever. It’s also more challenging when face-to-face interactions aren’t possible. Video chats should be used as much as possible with an emphasis on employees’ feedback more than your own comments. • Recognition: Increase the frequency and quality of recognition. Show-ing genuine appreciation for safety (and other) practices and participation increases the likelihood this will hap-pen more in the future. It also boosts morale, discretionary effort and doesn’t cost a penny.• Employee Participation: Increase employee engagement in policies, suggestions, observations and other systems. Engaged employees are ve times less likely to have a safety incident and seven times less likely to have a lost time incident (Vance, 2006). According to a Gallup meta-analysis study, engaged employees had 48 percent fewer safety incidents versus disengaged employees (Harter et. al., 2009). • Follow Up: Capture all learnings from these interactions with employees. Respond quickly and effectively to any concerns. Closing the loop with em-ployees’ issues demonstrates that you value their opinions and are commit-ted to making their lives better. Also, advertising successes demonstrate real leadership commitment. Why it All MattersImproving safe production culture builds morale and minimizes the probability of serious safety incidents. Investing in safety also provides a good return on investment.• High injury rates disrupt business oper-ations, undermine motivation, interfere with productivity, generate unforeseen costs and affect long-term protability (Argilés-Bosch et al., 2014).• Each prevented lost-time injury or ill-ness saves $37,000, and each avoided occupational fatality saves $1,390,000 (NSC Injury Facts, 2013).• Over 60 percent of CFOs reported that each $1 invested in injury prevention returned $2 or more (Liberty Mutual Chief Financial Ofcer Survey, 2005).• Improving safety culture leads to re-duced turnover and increased employee engagement (Huang et. al., 2016), improved job satisfaction (Clarke, 2010), and fewer injuries (Beus et. al., 2010).• A review of 18 case studies showed an average increase of 66 percent in productivity, 44 percent in quality, 82 percent in safety performance, and 71 percent in cost benets for companies that implemented effective safety initia-tives (Maudgalya et. al., 2008).Call to ActionSmart leaders regularly learn from leader-ship pioneers, network with trusted advi-sors, demonstrate active caring, and invest in the soft skills of eld managers and supervisors. Leaders who effectively apply these four fundamentals will improve safe production culture and organizational performance. This is especially important in tight scal times and a pandemic. Take a few moments and assess how you’re doing with these four key factors. What are you doing well? How can you improve moving forward? Honest self-assessment will enable positive actions in the future. Improving these four factors will make you a better leader and help improve your safe production culture and overall organizational performance. Dr. Josh Williams is a partner with Propulo Consulting, a global management consulting rm delivering signicant and sustainable improvements in organizational performance. For over 20 years, he has partnered with clients around the world to drive increased discretionary effort and improved strategic execution. Williams is the author of Keeping People Safe: The Human Dynamics of Injury Prevention and received the Cambridge Center National First Prize for his research on behavioral safety feedback. Contact: josh.williams@propulo.comEric A. Michrowski is president and CEO of Propulo Consulting, a global management consulting rm delivering signicant and sustainable improvements in organizational performance. He is a globally recognized thought leader and guru in Safety & Operational Performance and a highly sought-after executive speaker who is recognized for his innovative evidence-based approaches to safety and operations. Michrowski has been featured on TV, in articles, on podcasts and has an upcoming ForbesBooks book to be published this year. Contact: eric.michrowski@propulo.com

Page 52

Oilman Magazine / September-October 2020 / OilmanMagazine.com50OILMAN COLUMNApril 2020 saw oil prices dip negative for the rst time in memory. A mix-ture of COVID-19 travel restrictions worldwide, an oil price war and poten-tial global recession led the oil price to tumble. As a cyclical industry, the oil and gas sector is used to weathering storms, but this is the second in quick succession after the 2014-15 crash, meaning this one is different. It’s likely the impacts of this downturn will be here for a while; despite prom-ising signs of a price recovery, we’re going to have to get used to operating at a low oil price for some time. There are even “concerns that we may be seeing the beginning of a second wave of the pandemic,” according to Bjornar Tonhaugen, SVP, Head of Oil Markets at Rystad Energy. Naturally, companies will look both internally and externally to reduce costs in response, whether that’s by delaying works, reducing headcounts or cutting expenditure along the supply chain; however, the best answer is likely to be innovation. For example, the industry is already embracing digital solutions such as remote monitoring, but could a rethink of project design and planning help, too? All sorts of innovation will come into play: PwC notes that “in-novation is king for longevity – time to double down on … new ways of work-ing.” This intelligent approach to inno-vating and nding new ways of working can offer operators a solution to ensure maximum return from any investment. Reduced Working OffshoreWe’ve seen offshore staff numbers reduced to help protect from COVID-19 and it’s not clear yet when those numbers will return. Oil and Gas UK suggests 4,500 staff have been “stood down” as a result of coronavirus. Safety is always of paramount importance, but this introduces a new aspect to consider. Previous downturns have meant that operators have already looked for ways to create efciencies, lessen time off-shore and reduce the number of people needed for certain operations. For exam-ple, the introduction of smart platform-to-shore communication systems helps reduce the number of people needed offshore and, consequently, helicopter ights, signicantly reducing both risk and cost. Operators can also reconsider their drilling project approaches to the same effect. For example, solutions that can help safely and quickly navigate the early stages of new drilling operations are a smart approach to achieving the same effect at an early stage, by reduc-ing the number of personnel needed on drilling rigs. Naturally, we’ll see the sector continue with this type of evolu-tionary innovation to keep staff safe and protect the bottom line. Oil and gas companies need innova-tive solutions to help adapt to changing operational practices and, while these are current, short-term changes in reaction to COVID-19, it is likely these changes will become long-term ones if proven to be effective and of good value. With all aspects of project costs being revised and revisited and a lingering pandemic threat, reconguring offshore operations to utilize solutions that require a slimmer offshore workforce remains a key driver going forward.Race to First OilThese longer-term changes to personnel deployment will also be mirrored in the perennial drive to reduce time to rst oil. As soon as the well is drilled, the clock starts ticking as operators look for fast returns on investments. In the near term, we’re likely to face a global recession alongside sector-specic challenges, making banks risk-averse and capital harder to come by. Therefore, being able to demonstrably reduce time to rst oil won’t only provide a faster return, it will reduce project risk, making it more likely the operator can raise credit and get the project off the ground Future Forward Operations: Putting Innovation at the Top of the Offshore Agenda By James LarnderPhoto courtesy of karlstury – www.123RF.com

Page 53

Oilman Magazine / September-October 2020 / OilmanMagazine.com51OILMAN COLUMNin the rst place. One way to do this is to take a modular platform approach to eld development, such as that of our Sea Swift platform. Designed to be fabricated across multiple locations, in local yards and assembled on-site using available installation infrastructure, the reduced-steel design allows for simultaneous progress on different parts of the platform. With this approach, platforms can be up and running in as little as 10 months.There is no crystal ball to see where the oil price might go, and varying predic-tions offer a range of both pessimistic and optimistic outlooks but, under any scenario, innovation that cuts time to rst oil and brings rapid returns on investment will be welcome.Costs Over TimeOperators can go further to reduce project risk and make developments more attractive by rethinking procurement approaches. The signicant upfront costs incurred when buying equipment do put assets on the company balance sheet, but can be a major drain on CAPEX. Rental options can be a powerful alternative. Upfront costs are reduced and operators benet from the provider’s expert technical support, further lowering risk to large projects. Sometimes this shift in mindset is an effective way to change the project’s fortunes without changing the fundamental engineering.Ultimately, this amounts to a change in mindset comes when considering CAPEX, OPEX and even DECOMEX. Traditionally, these costs are looked at in isolation, but a TOTEX or whole-lifes-pan approach could be the best way to shave millions of dollars off the project. With the oil price hovering around the $40 mark, choosing a solution that of-fers lower total cost of ownership could be the factor needed to make a project viable, including decommissioning. This is where having a future-forward ap-proach is key. Decisions need to look beyond short- to mid-term outcomes so that all innovations and options are considered with TOTEX in mind.For every project, every operator will have the need to strike a unique balance between upfront and ongoing expendi-ture, meaning that exibility is key. This exibility is be delivered by new ap-proaches to established industry meth-ods to put new options on the table.During this downturn, we’ve collabo-rated extensively with operators and the supply chain on how to forge the best path forward based on their individual circumstances. We’ve seen smaller, nimble operators jumping at the chance to get rigs at a reduced CAPEX and thereby open up opportunities market conditions are offering.Innovative SolutionsIf there’s one thing the cyclical nature of oil and gas has taught us, it’s you can’t afford to stand still. The industry will continue to adapt and evolve and use innovation to get us out of tight spots. With operators now facing the job of making projects viable with an oil price around $35-50, creative results will be tried and tested to maximize returns. Following the downturn of 2014-15, operators have already slimmed down operations with the “low hanging fruit” solutions implemented. The short time elapsed since the last downturn means that costs hadn’t started to creep up-ward again and the industry was already in innovation-mode. Keeping – and evolving – that mindset of innovation for marginal gains will be crucial for the industry to weather this unexpected lower oil price storm.Graduating with a mas-ter’s degree in chemical engineering from Not-tingham University and having almost 20 years’ experience in the oil and gas sector, James Larnder has worked for service companies in a variety of project engineering, offshore, operational and management-based roles both in the U.K. and overseas. Since joining Aquaterra Energy, Larnder has devel-oped the company’s service range and assumed a number of roles including project engineering, technical sales, as well as being involved with the com-pany’s product strategy and business development. Advertise with us!Are you looking to expand your reach in the oil and gas marketplace? Do you have a product or service that would beneﬁt the industry? If so, we would like to speak with you!We have a creative team that can design your ad! OilmanMagazine.com/advertise • Advertising@OilmanMagazine.com • (800) 562-2340 Ex. 1

Page 54

Page 55

Oilman Magazine / September-October 2020 / OilmanMagazine.com53FEATUREyear (and, hopefully, has since been recovered), reads:The rst commercial discovery oil well in the Permian Basin was named for W.H. Abrams, leasing agent for the Texas & Pacic Land Trust. The well rst produced oil in February 1920 at a depth of 450 feet; but in June 1920, a better showing of oil was found at 2345 - 2410 feet. On July 16th, 1920 the well was “shot” with nitroglycerin. As a crowd of 2000 people looked on, a great eruption of oil, gas, water, and smoke shot from the mouth of the well almost to the top of the derrick. Shortly after, the well owed at a rate of 129 barrels daily, but soon settled down to 20 barrels per day. From this well and a well nearby, the Rio Grande Oil Company laid the rst commercial oil pipeline in the Permian Basin. The rst load of oil went through the pipeline on April 3, 1922. W.H. Abrams No. 1 was re-designated on May 1, 1968 as Westbrook Southeast Unit No. 701, formed to increase oil recovery from the Westbrook Oil Field by water ooding. This enhanced oil recovery technique has produced 67 million barrels of the more than 100 million barrels of oil recovered from this eld. Designated as major elds, only a small number produce 100 million barrels of oil or more. Fifty-six major elds are located in the Permian Basin, the fourth largest oil producing area in the US. (1967, 1996)Author Tom Pendleton captured the ethos of Texas’s nascent petroleum industry in his novel, The Iron Orchard, which was published in 1966 to great acclaim, eventually earning it the nickname “the wildcatter’s Bible.” (While there are times when the book, now out-of-print, can be found for a reasonable price, it is not unusual to see it being sold online for hundreds of dollars.) Over 50 years – and a lot of false starts – later, a movie by the same name was nally released in 2018 (to far less enthusiasm), immortalizing the hardscrabble, sometimes violent, life in the oil elds in the early days of the “Wild West” Texas. While both were works of ction, there certainly is no shortage of stories about real-life wildcatters and West Texas oilmen, like Michael Late Benedum, Joseph I. O’Neill, Jr., George Thomas Abell, and Clayton Williams, Sr., (and later his son, “Claytie”), who were involved in the frontier days of the Permian [see sidebar].According to the Texas Railroad Commission (RCC), which gets its gures from the Federal Reserve Bank in Dallas, the greater Permian Basin now accounts for nearly 40 percent of all oil production in the United States and 15 percent of its natural gas. Last year, Forbes, based on numbers coming from Aramco, reported that the Permian had overtaken Ghawar in Saudi Arabia as the world’s top producing oil eld in late 2018.No oil-producing region, regardless how prolic, is immune to the vagaries of the cyclical petroleum industry, but the Permian Basin in West Texas and southeastern New Mexico seems to have somewhat of a Teon® shield. During the 2014 bust when West Texas Intermediary (WTI) plummeted from a high on June 7th of $107.95/bbl. to $44.08 by January 28, 2015, the Permian appeared to be the one place that might emerge relatively unscathed. The industry has been on a roller-coaster since then with WTI prices reaching as low as $27.94 on February 9, 2016, and as high as $75.30 on October 1, 2018, remaining fairly steady in the interim. After dipping to $42.53 on December 24, 2018, WTI rang in New Year 2020 at $63.27 on January 6th before the unthinkable happened on April 20th – the price of oil went into negative numbers for the rst time since NYMEX oil futures began trading in 1983. The market corrected itself, as it normally does, and, as of this writing (August 14, 2020), WTI is currently at $42.01. (Source: EIA)Producers in the Permian have proven, thanks in part to technical innovations – namely, horizontal drilling – that they can run leaner operations, drill more economically and, according the Federal Reserve Bank in Dallas, break even at around $50 a barrel, although that varies depending on location and other factors, but no one could have predicted the current situation the world nds itself in.Previous scenarios don’t begin to compare to the economic, political and social upheaval in 2020, with Continued on next page...President Donald J. Trump signs oil and gas permits at the Double Eagle Energy Rig in Midland, Texas, July 29, 2020. Photo courtesy of Shutterstock/Mark Rogers

Page 56

a worldwide pandemic, oil price wars, unprecedented levels of unemployment, and the stock market crash. In oileld terms, this is a bust of epic proportions. (“Downturn” doesn’t quite convey the sense of displacement that is reverberating through the industry and the world at large.) According to Haynes and Boone, which monitors oil and gas bankruptcies, over 30 companies have led for protection during the rst seven months of 2020, including some major players like Chesapeake, Denbury, Rosehill, and Sable Permian Resources, among others.The average rig count, as reported by Baker Hughes, in August for District 8 (Midland) was 64 – far greater than that of any other district in Texas. The RRC reported that Midland independent exploration and production company, Summit Petroleum, LLC, led for nine permits – the highest number the week of July 1st - 7th and a surprisingly high number in the middle of a crisis, as other companies scale back on drilling – for horizontal wells in Upton Co.Even in times of disruption, the industry keeps innovating and making adjustments. One of the rst reneries to be built in the U.S. since the late ‘70s is slated to be constructed by Meridian Energy Group, Inc. north of the town of Kermit in Winkler County, although according to the company’s website, it has “allowed its option on this site to expire while . . . evaluating potentially more viable alternative sites in the area.” The proposed one billion dollar, 60,000 bdp Walton Renery (also known as the Permian Renery) will be Meridian’s second (after the Davis Renery in the Bakken in North Dakota) to operate under its new Environmental and Social Management Plan (ESMP), which aligns with the Equator Principles. As CEO William Prentice told Rigzone in February, not because it is being forced to by the government or in order to receive government funding or subsidies, but because “its founders and management team . . . wanted to create a rm that would be a protable agent of change in cleaning up one of the most archaic and dirty segments of the energy industry.”Another renery, this one in Pecos County northeast of Fort Stockton, is being developed by MMEX Resources Corp. to process lighter crudes. In addition to a 10,000 bpd crude distillation unit (CDU), there will be a 100,000 bpd facility producing transportation-spec fuels.The headline-dominating news to come out of the Permian was last year’s acquisition of Anadarko – and its 240,000 acres – in a gutsy move by Occidental Petroleum CEO Vicki Hollub. After a bidding war with Chevron over the prized acreage and production, and a protracted battle with billionaire activist investor Carl Icahn, Oxy emerged victorious, becoming the largest landholder in the Permian with three million net acres. On August 8th, the date of the closing, Oxy’s stock opened at $46.57; as of this writing, it is priced at $13.82. Hollub has made it clear in interviews that she believes the Permian will continue to be a major contributor to the country’s energy resources, as she told Time in January 2019, “for many years to come,” something she reiterated in similar terms at the recent Society of Petroleum Engineers (SPE) virtual conference in July.West Texas was the site of a late July campaign fundraising trip by Presi-dent Donald Trump, where he gave a speech at a $2,800 a plate private luncheon held at the Odessa Marriott Hotel (for $50,000, couples could have their photo taken with the president Oilman Magazine / September-October 2020 / OilmanMagazine.com54FEATURE

Page 57

Oilman Magazine / September-October 2020 / OilmanMagazine.com55FEATUREChapter 8: Drilling the University No. 1-B WellWhen the University 1-B well nally struck oil at 8,525 feet on December 1, 1928, Clayton [Williams, Sr.] was not there to see proven his hypothesis that commercial quantities of oil did exist at deeper levels in the Permian Basin. He had resigned from Texon on August 1st hav-ing become engaged to be married. He would later say that he resigned because he did not want to raise a fam-ily in the rough world of the oilelds. Clayton had hired his brother Waldo as an as-sistant engineer in 1926, and Waldo was on the site during the last few months of drilling. The story of the completion of the University 1-B is a part of Texas oil his-tory lore. According to both [author and historian Samuel D.] Myres and Waldo, [Frank] Pickrell decided that enough money had been spent on the project and ordered [Carl] Cromwell to stop drilling at 8,500 feet. “Carl accepted the order,” Waldo wrote, “but later when talking over the prospects of a producer with me, he suggested that he disappear without telling me the order to shut down and that I carry on down until we had a producer or a dry whole. On December 1st, the bailer would not go down against the gas pressure and on the 2nd of December the well owed 40 barrels of high gravity oil.”It took Waldo and the crew two days to locate Cromwell, who was drinking heavily in Sweetwater, Texas. “However, he was sober the minute he absorbed our message and within ve hours was on the ground in efcient charge of the situation.” By January 1, 1929, Univer-sity 1-B was producing more than 1,600 barrels a day of high-quality oil and, ac-cording to Myres, proved the practicability of deep wells both in the Big Lake eld and elsewhere in West Texas. Locating the University 1-B was the most notable achievement in Clayton’s oileld career and provid-ed the foundation for his reputation as one of the Permian Basin’s signicant petroleum engineers. He did not boast about the discovery in his personal papers and let-ters, writing only specic details associ-ated with the location and drilling of the well. But he was ercely proud of the discovery, [daughter] Janet Pollard says. “I remember one Christmas after I was married, we were in Fort Stockton at Daddy’s house and a man dropped by. This man had recently had some success in the oilelds, and he was talking about various wells including the University 1-B. ‘I located that well,’ I remember my dad said, and the man replied, ‘The hell you did.’ My dad got very angry, stood up and said, ‘The hell I didn’t.’ I thought he was going to get into a ght, but the man backed down and apologized.” Excerpted with permission from the author. Harsh Country, Hard Times: Clayton Wheat Williams and the Transformation of the Trans-Pecos by Janet Williams Pollard and Louis Gwin (Texas A&M University Press; September 1, 2011). Harsh Country, Hard Times: Clayton Wheat Williams and the Transformation of the Trans-Pecos by Janet Williams Pollard and Louis Gwinand for $100,000 per person sit at a roundtable with him). Ac-cording to the Odessa American, the event raised about $7 million. After the fundraiser, President Trump signed four permits that will allow for the expansion of pipelines and railroad infra-structure, including two that will provide for crude from Texas to be exported to Mexico. He then went back to Midland, where he had own in, to visit a rig site owned by Double Eagle Energy.The area is no stranger to presidential visits. After President Barack Obama’s 2009 inauguration, President George W. Bush and First Lady Laura Bush ew to Midland, where Bush had worked in the oil industry prior to entering politics, to mark the end of his two terms as president. In 2012, President Obama stopped in the tiny town of Maljamar, near the larger towns of Hobbs and Carlsbad, in Lea County, part of the Permian Basin that extends into New Mexico. He then traveled to oil and gas production elds located on federal lands in the area, which were the site of more than 70 active drilling rigs at the time.The attention to the Permian by presidents from both parties only serves to underscore the region’s importance to America’s energy strategy 100 years after the Texas & Pacic Abrams No. 1 gave the nation a glimpse of the potential it held for the future.Rebecca Ponton is Editor-in-Chief of OILMAN’S newly launched companion publica-tion, OILWOMAN Magazine. She is an energy contributor to Forbes.com and the author of Breaking the GAS Ceiling: Women in the Offshore Oil & Gas Industry (Modern History Press; May 2019).

Page 58

Oilman Magazine / September-October 2020 / OilmanMagazine.com56OILMAN COLUMNWith growing worldwide momentum in decarbonization, the oil and gas industry is starting to acknowledge its impact on climate change, and is now increasingly committing to carbon neutrality goals and taking part in collaborative decarbonization initiatives. The majority of greenhouse gas (GHG) emissions associated with the oil and gas industry are Scope 3 in nature, i.e. emissions from the combustion of fossil fuels. Oil and gas majors are taking steps to eliminate their Scope 3 emissions, but this is a long-term and complex endeavor; tackling Scope 1 emissions is easier as they are within the direct control of oil and gas companies. The majority of Scope 1 emissions for the oil and gas industry comes from aring of associated gas, a form of natural gas that is frequently produced as a byproduct in oil production. Due to a variety of safety, economic and convenience factors, it is common practice in the oil and gas industry to burn associated gas via aring or vent it directly into the atmosphere. The aring of associated gas represents a grow-ing source of GHG emissions for the sector, particularly in regions like the U.S. that have experienced rapid devel-opment in recent decades. While aring volumes and rates vary signicantly depending on the reservoir and its char-acteristics, aring emissions can make up a signicant portion of upstream GHG emissions. In the U.S. Bakken oil-eld, for example, venting, aring and fugitive methane emissions contribute nearly 90 percent of the eld’s upstream GHG emissions due to its moderate gas content and high are rates.Flare reduction goals have been at the forefront of decarbonization with growing commitments from both industry players and government entities to eliminate aring altogether by 2030. In order to meet these are reduction goals, particularly in regions without direct access to gas markets, operators must nd a productive use for the associated gas.There are several existing options for oil and gas operators to reduce aring at new and existing facilities. The simplest and most optimal solution is to leverage gas pipeline infrastructure to capture, gather and transport associated gas to local gas markets, but this is not always a feasible or economical option for all assets. In remote offshore facilities, for example, the high capital expense of building new pipelines may not be justied for the volume of associated gas that could be sold to onshore markets. Another practical solution is to use associated gas to power operations on-site. One emerging idea from Crusoe Energy Systems involves the use of associated gas to power modular onsite data centers for digital operations like bitcoin mining. This is a unique approach to are mitigation that enables operators to make a prot on produced gas in areas with limited takeaway capacity, but would not be feasible for most offshore assets due to its large footprint.One way to overcome the lack of gas pipeline infrastructure is to simply leverage oil pipelines instead. Doing so requires the conversion of associated gas to a liquid form, which can be done through Fischer-Tropsch technology, in a process known as gas-to-liquids (GTL). Fischer-Tropsch technology is proven at the commercial scale in Malaysia and Qatar but it has only been deployed for large-scale operations. To date, there is no small-scale Fischer-Tropsch project that proved successful. The economic viability of GTL projects is dependent on the price differential of natural gas and crude oil; in periods of low natural gas price and high oil prices, GTL Technology for Flare Mitigation is Critical to Tackling Scope 3 Emissions By Holly HavelPhoto courtesy of Lux Research

Page 59

Oilman Magazine / September-October 2020 / OilmanMagazine.com57OILMAN COLUMNGTL projects can be economically viable. The world witnessed such a situation in the early 2010s when oil prices were over $100/barrel. At that time, multiple companies offering small-scale Fischer-Tropsch solutions popped up and targeted associated gas streams; however, oil prices crashed in 2015 and destroyed the economic prospects of GTL projects using associated gas. The ongoing pandemic suggests that it is unlikely oil prices will reach their heyday of the past decade. Despite the challenging economic situation caused by the crash in oil prices, small-scale Fisher-Trospch technology developers survived and have turned towards greener pastures – renewable fuels. Companies such as Fulcrum Bioenergy and Velocys are currently developing GTL projects converting solid municipal waste into renewable hydrocarbon fuels in the U.S. and U.K., respectively, leveraging the nancial credits available for low-carbon fuels in those countries. Over the past few years, Fischer-Tropsch technology has found yet another use-case – CO2 utilization. In this area, CO2 and hydrogen (presumably obtained from water electrolysis) are converted into liquid hydrocarbon fuels via a series of processes including Fischer-Tropsch. The application of Fischer-Tropsch in CO2 utilization has so far only been tested at the demonstration scale, but the rst commercial-scale project will be built in 2026 by Norsk e-Fuel in Norway. Producing hydrocarbon fuels from CO2 is counterintuitive as the CO2 itself originally came from fossil fuels. Norsk e-Fuel is essentially building a plant that is based on reversing the combus-tion process. Despite its challenging economics, the process is necessary for the energy transition. Unlike the road transportation sector which can be de-carbonized with electricity, the aviation and marine sectors will still rely on hy-drocarbon fuels due to its unparalleled energy density compared to batteries. If we cannot change the type of fuel we use, then we need to change its source – in this case, swapping crude oil with CO2 and green hydrogen. Fischer-Tropsch technology offers a unique opportunity for oil and gas companies looking to succeed in the transition to a low-carbon economy. Synthetic fuels made from CO2 are indispensable for the industry to neutralize its Scope 3 emissions; however, the market for CO2-based fuels is still immature. But Fischer-Tropsch technology can also be used in the more pressing case of eliminating the industry’s Scope 1 emissions through abatement of aring. Admittedly, producing synthetic fuels from associated gas merely offsets Scope 1 emissions to Scope 3 emissions, but deploying Fischer-Tropsch technology today will provide the oil and gas industry with valuable expertise and know-how in anticipation of the technology’s much-broader deployment for CO2-based fuels. This means oil and gas companies should prioritize Fischer-Tropsch technology today in their quest for carbon neutrality.Holly Havel is a research associate for the energy team at Lux, where she conducts research on technological developments and market trends in the oil and gas and power generation industries. Prior to joining Lux Research, Havel worked as a wellsite geologist on oil rigs in Oklahoma where she logged lithology, drilling parameters, gas units and formation tops for the duration of the well logging period. More recently, she has experience as a scientist for an environmental consulting company where she conducted eld activities at active petroleum release sites and submitted regulatory reports to local and state agencies. Havel holds a B.S. in geology from Union College.

Page 60

Oilman Magazine / September-October 2020 / OilmanMagazine.com58OILMAN COLUMNWith operational disruptions, supply chain lags, and reductions in consumer spending, the coronavirus pandemic continues to impact business globally.Stalled or stopped business activities, combined with a slowed demand for oil, are particularly affecting the energy sector. The oil and gas industry is used to whiplash reactions to market changes and, consequently, can take downsizing, restructuring, and mergers and acquisitions (M&A) in stride. After all, our current economic landscape marks the sector’s third price collapse in 12 years. In some ways, this downshift is no different to prior cycles. The fact that the demand side of the supply-demand imbalance is due to a global pandemic is a considerable wrinkle. From full-time staff to offshore workers, pipeline personnel, and local and global contract workers, the pandemic impacts the way each position in the industry is both executed and managed.In addition to the breakeven price point of a given eld, a further consideration for business leaders will be their response to any international and regional outbreaks. Has COVID-19 prevention training been added to health and safety policies? Have employee and contractor testing been taken into account? These concerns are critical for any company and they are only compounded when adding a new group of employees and contractual arrangements to their own over the course of an M&A, a practice that may become more common in the energy sector moving forward, given that over 30 oil companies have already declared bankruptcy this year. According to Business Insider, experts predict more will follow.M&A and ReorganizationsIn July 2020, Chevron announced its acquisition of Noble Energy in an all-stock transaction, targeted to close in Q4 2020, and breaking the ice on M&A in the current cycle. While signicant, the deal is a fraction of what Chevron was considering paying for Anadarko (acquired by Occidental) just a few quarters ago. From an activity perspective, the M&A represents an important pivot from otherwise cost-controlled measures across the industry. Chevron has stated that its latest acquisition will add $300 million in cost synergies to the organization post-merger. For Chevron, Occidental and Mara-thon Petroleum, integrating their workforces requires the same level of execution expected under normal circumstances, which includes plan-ning for such variables as cultural t. After all, up to a third of integrations that fail are due to an organizational mismatch, according to research by McKinsey. “In this industry,” the re-port states, “the importance of culture is magnied by its impact on safety and operational risk.” A recent survey of the energy industry workforce conducted by the University of Houston supports this assessment, with 55 percent of respondents suggesting the energy industry should invest even more in employee How COVID-19 Is Forcing Oil And Gas To Rethink Workforce Management By Richard MarshallPhoto courtesy of Nakisa

Page 61

Oilman Magazine / September-October 2020 / OilmanMagazine.com59OILMAN COLUMNhealth and wellbeing in light of the pandemic.How can organizations simultaneously track such essential health and safety concerns, gain insights about the impact on business operations in real time, and plan for business continuity? The answer may be technology.The Business Impacts of Modernizing ITIn 2017, during an uptick in the oil and gas industry, energy giant Phillips 66 chose to invest in company-wide, enterprise resource planning (ERP) technology. With 80 percent of Philipps 66’s workload now hosted in the cloud, the organization’s digital transformation has proven to be a game-changer, revealing the critical value of leveraging IT to both improve global workforce visualization and streamline business operations. The company was one of the rst of its kind to announce a $700 million cut in spending in 2020 and has credited the speed at which it could make such an important decision to its digital transformation. As early adopters in the sector, Phillips 66 led the way for other companies in the industry to follow suit.While it may seem counterintuitive, with spending under scrutiny and a freeze on IT budgets, now is an ideal time for players in the energy sector to consider a human capital management (HCM) solution to support a true business transformation able to sustain long-term business operations.Digital HCM solutions support data-based decision-making and as a result – seen in the Phillips 66 example – can accelerate an organization’s desired ac-tion plan by enabling data conversion and reporting, offering modeling and visualization of data across multiple organizational structures, and by measuring the impact of any potential and implemented changes including workforce realignment, reduction in force and more.Human Capital Management Technology for 2020It’s no surprise that Gartner’s latest Hype Cycle for Human Capital Management analysis conrms that the pandemic has sparked signicant demand in the evaluation and redesign of workforce management processes and technologies. When all the relevant stakeholders are able to access a single source of organizational truth in a purpose-built, secure, and cloud-based collaborative solution, an organization moving through the COVID-19 crisis can accelerate value delivery. While managing potentially new remote work mandates, all the while considering performance management, scheduling, activity tracking, and health and safety precautions for a diverse and international workforce. Real time access to accurate, reliable HR data makes this possible.With the help of technology, HR professionals and business leaders can easily visualize their team members in the Permian Basin or the North Sea on the global map and quickly drill down into each population. Furthermore, they can apply lters for critical employees and high performers or other diversity and inclusion (D&I) metrics to learn how a divestiture or reorganization might affect performance on an individual or company-wide level. An HCM solution like Nakisa Hanelly can also help shape a tailored communication and retention plan for key talent (an unforeseen by-blow of many reorgs or M&A), ensure effective succession planning, and allow stakeholders to understand instantly how their new business model might impact company demographics or diversity metrics. Likewise, aggregating salary and benet information in a single solution allows business leaders and HR professionals to quickly test and determine the nancial impacts of different scenarios and provide the concrete data – the dollars and cents – needed for those realized savings, whether they add up to $300 or $700 million. All of this is possible while avoiding the churn of spreadsheets and stafng of manual workloads still prevalent in most organizations in the energy sector, which means an organization can achieve its target Key Performance Indicators (KPI) more quickly and at less cost. The pandemic has increased the need for business agility in the oil and gas industry. Leveraging the benets of technology to align goals and drive organizational transformation can unlock competitive leadership, distin-guishing those who simply survive the current disruption from those able to reinvent themselves and thrive.As head of Nakisa’s Global Oil & Gas Industry Practice, Richard Marshall is responsible for leading initiatives to enhance the delivery of value to customers and prospects in the vertical from the Nakisa solution set. He has covered oil and gas and energy services at Nakisa since 2016 and at different times in his private-sector career, which began in investment banking in New York and London. Marshall’s prior experience includes work with JP Morgan, Deutsche Bank, RBC, PNC and SAP, in addition to serving as CFO of a portfolio of companies. He served for eleven years in the Canadian Forces, nishing as a Captain on C-130 Hercules transport aircraft. Marshall holds a BA from the Royal Military College of Canada, an MA in international economics from Johns Hopkins University, and an MBA (nance and accounting) from Columbia Business School.

Page 62

Oilman Magazine / September-October 2020 / OilmanMagazine.com60OILMAN COLUMNDuring these challenging times, with rigs drastically cut and completion crews on indenite hold, nding ways to immediately impact cash ow is critical. If you are a C-Suite, division VP or eld leader, there are a number of impactful strategies your team can implement today to drop more revenue into the bottom line.The strategies that will drive immediate cash ow results are pragmatic and entail aligning people, processes, technology and data. This includes getting out in the eld and starting a conversation with pumpers, building a production optimization process led by eld production teams, leveraging production and non-op data, and empowering the back ofce with the right technology to boost cash ow.People• Pumpers, lease operators and other eld staff are often overlooked as an opportunity area.• Take immediate action to visit and engage with eld production teams.• Acknowledge fractured leadership and create a clear channel of communication.Process• Field production teams have valuable insight into production optimization.• Empower eld staff to create short-term plans to improve their wells.• Redirect capital from drilling and completions projects to eld staff projects to increase cash ow.Technology• Production operations often rely on fragmented, legacy technologies.• Cloud-based solutions enable collaboration among eld and back ofce.• A unied platform eliminates data silos, streamlines eld operations and accounting.Data• Operated and non-operated data is key to uplifting margins and reducing costs.• Create a data management culture to ensure data quality and availability.• Leverage non-op data to improve revenue forecasts and accruals.Bridging the Gap Between Executives and Field StaffIt’s ironic that after spending millions to drill and complete a well with much fanfare, operators often unceremoniously hand over the daily upkeep of a new well to eld staff that is charged with maintaining it for its entire lifespan. And while drilling and completion teams are often rewarded with celebratory events when they reach certain targeted goals, production teams are often inadvertently ignored.Don’t wait! Immediately set up time to visit eld production teams; both group sessions and a few one-on-one meetings will prove to be immensely helpful in the effort to increase cash ow. Don’t rush it. Senior leadership should devote plenty of time for these visits, as they could have the biggest impact the organization has on increasing base production all year.For mission critical eld staff that has been unintentionally marginalized, it is important to create a dialogue, not a monologue or pep talk. Ask meaningful questions, then be sure to listen. Hear what they have to say and encourage them to open up and share their ideas around improving well performance and reducing downtime. Most eld staff will have a plan for increasing the base production of their wells in Implementing the Right Strategies to Immediately Boost Operator Cash Flow By Kevin Decker and Steve HaglundPhoto courtesy of Shutterstock

Page 63

Oilman Magazine / September-October 2020 / OilmanMagazine.com61OILMAN COLUMNmultiple ways. They just need help with a few roadblocks, a budget or simply encouragement to help get their ideas and plans into motion.Acknowledge fractured leadership. Be transparent when talking to production teams. While drilling and completion departments often have one VP or senior leader over the entire division, production often suffers from “fractured leadership.” It can include production eld leadership, divisional or business unit leadership, engineering leadership, reservoir leadership, and sometimes other teams with a vested interest in impacting eld production. This often produces mixed messages to eld production personnel, leading to conicting or wasted efforts, projects and time.By getting out in the eld and listening to eld staff as well as acknowledging fractured production operations leadership, management teams can open up a clear channel for incorporating valuable eld-level insights that can provide immediate payoff for production optimization and increased cash ow.Building a Continuous Optimization Process Led from the FieldLeveraging new channels of communication with eld production teams, the next step management teams can take to quickly boost cash ow is to create clearly aligned and unied processes to enhance base production backed by a small budget and investment of senior leadership time.Due to fractured leadership, eld production teams often receive multiple different plans, strategies and initiatives. Rather than taking a top down planning approach, start a grass roots initiative that enables eld production staff to initiate their own plans for optimizing production for their well set. Listen to their ideas and align those insights across teams to begin building a broader plan guided by those closest to the wellhead. That plan can serve as the initial draft for foremen, optimization teams, engineers and others to add their contributions. Most pumpers, lease operators, automa-tion or measurement techs have un-tapped ideas about improving base pro-duction (wells they know will respond if someone will listen). Let those ideas help you design your short-term road map. That plan should be simple and cohesive with a laser focus on improv-ing cash ow immediately, including:• Articial Lift – insights into optimal set points and equipment conguration for rod lift, ESPs, etc.• Oil Stock Management – ideas around improving hauler efciency and accelerating sales runs.• Daily Process Optimization – reducing pumper admin burdens so they can focus on optimizing their wells.• Operating by Exception (OBE) – giving explicit permission to prioritize wells with most down volume.• Downtime Reduction – ideas around proactively preventing compressor/equipment failure and minimizing downtime when wells are ofine.• Technical Innovation – short-term technology ideas with big potential for increased volume and reduced risk/LOE.Field production teams will often move heaven and earth to hit a goal set by their CEO, COO or VP. Set challenging but achievable goals in each of the areas above with a short-term end date, then measure the progress on at least a weekly basis. To succeed, senior leadership will need to invest a little of its time and energy as well as nd ways to redirect capital to eld production staff and their cash ow projects, such as investing portions of unused drilling and completion budgets.Figure 1: Cash Flow Generating Strategies Leveraging People, Process, Technology, and DataContinued on next page...

Page 64

Oilman Magazine / September-October 2020 / OilmanMagazine.com62OILMAN COLUMNUplifting Margins with Operated and Non-Op DataIn addition to optimizing production, accurately booking reserves and accruing for inbound revenue (volume) and expenses is also key to uplift your margins. Operated and non-operated data holds the key to optimize both revenue and costs; however, organizations must rst create the right data management culture.Within every oil and gas company exists vast potential to improve cash ow leveraging existing information about assets and production, yet it is all too often trapped in data silos or the data is simply underutilized. To unlock this revenue-generating potential, take the time to automate processes and empower the right resources with data management and QC tasks.• Automate production workows – Wherever possible, automate manual production tasks across your organization to free up time for those techs and staff to nd, validate and analyze your data. Don’t assume that it’s already been done, because often those tasked with automating workows have job security concerns that interfere with that automation. Demonstrate that automation enables them to analyze versus input the data. • Free up production engineers – Do a quick engineering process review and nd out if your production engineers are doing true engineering, rather than preparing AFEs, county courthouse visits, endless slide decks for leadership, etc. If not, allow them to do what they love and give them the production data to do it. They will nd your best opportunities if they have the time and the data. • Find your data analysts – In every organization, there are several (although often quiet) data junkies that feed on data analysis projects. Get them engaged to nd the best production cash ow projects across your operations. There are hundreds of them waiting to be discovered and analyzed but need someone with the time and focus to do research.• Validate the data – Spend a little time empowering your IT, eld operations, and production accounting teams to identify where opportunities exist to clean the data. Very often, over time, teams build data correction into their daily routine, rather than validating it at the source. Cash ow generating data analysis depends on the quality of your data and the simple yet effective processes that validate it and keep it clean.• Remember your reservoir engineers – Every volume and process improvement that enhances the data makes your reservoir forecasts better, which mean more accurate cash ow and nancial projections. It pays to invest time and energy in to automating and validating this data so it represents the clearest, most accurate picture available. By engaging your teams (engineers, analysts, IT, and newly identied data analysts) your organization will be more prepared than ever to quickly compile a list of the best opportunities to immediately boost cash ow for minimal capex/LOE.Non-op data is one of the most overlooked assets that can boost or optimize cash ow, including reconciling revenue paid versus production volumes, improving reservoir production forecasts for non-operated wells, and improving revenue accruals for non-operated wells. Timely access to non-op data is also critical to identify risks associated with shut-ins or curtailed production. However, this vital data is often poorly circulated among partners with many operators prioritizing well data management for their operated assets over wells they only have a working interest in.Exercise your rights to your non-op data by working directly with your partners to obtain the data you need or participate in free or low-cost reciprocal data sharing/trading network to deliver non-op data right into your well database.Empowering the Back Ofce with the Right TechnologyAs advanced in technology as the industry has become in areas such as drilling, completions and geoscience, other aspects, such as business segment and enterprise level resource planning software (ERP) on platforms designed 30+ years ago, are virtually antiquated yet still considered “Best Figure 2: Cloud-based Visual Representation of Field Assets and Allocation Networks

Page 65

Oilman Magazine / September-October 2020 / OilmanMagazine.com63OILMAN COLUMNin Class.” Think of what ERP covers in an oil and gas business and the implications are astonishing. Upstream companies pervasively rely on vintage technology to run their business, from production operations and allocations to their general ledgers and revenue disbursement. Adding to the overall lack of innovation is the industry’s addiction to spread sheet allocations and workarounds in a Silicon Valley world.Choice of production operations technology is the key to building a clear channel of communication with eld production teams, collaboration around production optimization processes, and creating a free ow of data in the organization. However, legacy technology, dozens of point solutions, and data silos impede successful execution of these strategies and all too often inject delays, errors and unnecessary costs for the organization. Maintaining complex allocation networks, for example, and calculating daily allocations are critical to operator revenue; however, cumbersome legacy software, manual processes and spreadsheet-based solutions add signicant time and uncertainty that often limit visibility into production and cash ow.A unied production operations solution built on the Cloud offers scalability and affordability while accelerating data acquisition, processing, allocation and nancial reporting. As a result, operators can nally connect the eld with the back ofce to gain the up-to-date view of production and revenue they need to manage cash ow.Operators looking to benet from the Cloud and an integrated software platform are increasingly turning to W Energy Software. The company pioneered the oil and gas industry’s only unied production operations solution built on the Cloud that features modern eld data capture tools, production reporting, visualization of assets and allocation networks, and an extremely powerful and capable allocations engine. As a fully integrated upstream ERP platform, production accounting seamlessly ows into revenue and nancial accounting where production volumes are linked with actual commodity pricing to provide operators with a precise view of their nancials, eld costs and revenue.Yet the most valuable benets of a unied platform and W Energy Software are stability, predictability and reliability. By eliminating the need to maintain the dozens of software applications and tools that operators have historically relied on and providing a common and consistent dataset, W Energy Software elevates condence in your analysis, calculations and nancial results. When combined with increased performance, that trust can empower an operator’s workforce, reduce risk and accelerate business performance.The oil and gas business is an industry slow to change eld practices unless better alternatives are proven. Change is often difcult, especially with deeply ingrained eld and back ofce cultures, top down management, fractured leadership, underutilized datasets and legacy technology. But, with all of these challenges, there is still immediately actionable opportunities to make impactful change today. With a holistic strategy for creating a clear channel of communication with eld production teams, driving grassroots insights, harnessing operated and non-op data, and deploying a unied production operations platform, operators can drive profound change across the organization that converges on maximizing revenue, reducing costs and improving cash ow. Steve Haglund has over 20 years of experience in strategy, business development, operations, and consulting practice development in the information technology and oil and gas industries. He serves as Vice President of Field Operations at W Energy Software where he spearheads the software developer’s eld solutions for upstream and midstream. Haglund was previously President of NeoFirma (acquired by W Energy Software in 2019), where he grew the software company into a category leader in mobile and cloud-based oil and gas eld operations solutions. Prior to that, Haglund co-founded and served as President of Insolexen, a business integration services company and Michigan Fast50 Award winner, which was acquired by Percient, a public, IT services consultancy. Before that, he served in various capacities with webMethods, Andersen Consulting, Baker-Hughes, and FMC. Haglund graduated from the University of Illinois with a B.S. in Chemical Engineering and holds an MBA with Honors from the Cox School of Business at Southern Methodist University.Kevin Decker has nearly 30 years of experience with independent E&Ps, building and leading teams in the space where nance, eld technology, and operations services converge. His extensive experience includes optimizing eld production processes, developing best-in-class M&A integration processes with 135 acquisitions in 10 years, and optimizing drilling efciency and base production by applying data science and analytics to operations support center challenges. Decker is President of Peake, LLC, an energy, technology, and management consulting rm. He spent the bulk of his career at Chesapeake Energy where he held various senior management positions, including Director of Intelligent Production Operations, Director of Integrated Field Operations, and Director of Operations Data Services. Decker earned a B.S. in Accounting from Oklahoma State University and is a Certied Public Accountant.

Page 66

Oilman Magazine / September-October 2020 / OilmanMagazine.com64OILMAN COLUMNDrilling is an essential component in the oil and gas industry with operators using drilling as a method to excavate oil underground and from various resources. With drilling being as signicant as it is, it should also be performed efciently, yet many operators have difculty in this area. There are many oil and gas operators using outdated equipment during onshore and offshore drilling ventures, which not only causes inefciency, but poses potential harm to workers out in the eld. Using legacy drilling technologies and following old industry standards can hinder performance, increase risks for workers and affect prots. With this being a clear issue in the industry, oil and gas operators have been searching for solutions to improve their operations. Fortunately, oil and gas solutions company Sigma Drilling Technologies took note of this issue, developing a line of products that focus on the improvement of drilling processes. Sigma’s line, which includes pulsation control technology, was designed to help oil and gas operators save on costs and provide higher efciency during the drilling process. Founder of Sigma Drilling Technologies, Justin Manley, provided more insight into the company’s products, the benets Sigma’s products provide to oil and gas operators, and how such products are helping to strengthen operations in the industry.With a mission to improve oil and gas operations for customers through technology, Sigma was established through one simple question, “Why hasn’t anyone xed this yet?” Noticing a clear issue in the way companies carried out processes, Sigma resolved to help those companies operate more efciently. According to Manley, “Our initial product offering solved a 70-year-old problem our customers were simply just dealing with. Helping our partners achieve superior performance and protability while decreasing risks to personnel and assets in the eld is our driving force and how we operate.” Sigma uses products that can utilize a company’s existing equipment while eliminating their equipment’s inherent aws. “We believe in win-win relationships and our customers have really responded to our philosophy,” says Manley.To provide the best solutions to oil and gas operators, Sigma operates in a very niche market segment, developing unique products to enhance each user’s drilling and operational experience. “Our industry handles energy mitigation generated by the reciprocating pumps on the rig, better known as mud pumps,” Manley explains. “To mitigate these harmful energy signatures, mud pumps need to be outtted with pulsation dampeners. The industry standard pulsation dampener was designed over 70 years ago and utilizes a bladder charged with nitrogen gas. This was a tting solution 70 years ago when operational pressures were signicantly lower than modern drill plans,” Manley says. Recognizing that many companies were still operating through this outdated solution that was incompatible with modern drill plans, Sigma designed several proprietary technologies for the market, such as its Charge Free Conversion Kit, to upgrade existing equipment. “All of Sigma Drilling’s technologies revolve around a proprietary technology or our Charge Free technology. We have created unique products designed to utilize existing designs and equipment but alleviate all the complications created by antiquated pulsation dampeners,” states Manley. “Our proprietary Charge Free technology always has the proper compression rates to ensure high performance Improving Operations Through Technology: How Sigma Drilling Technologies is Revamping Industry Drilling Practices By Tonae’ HamiltonPhoto courtesy of Sigma Drilling Technologies

Page 67

Oilman Magazine / September-October 2020 / OilmanMagazine.com65OILMAN COLUMNand fantastic measurement while drilling (MWD) signal detection and, most importantly, never exposes rig personnel and equipment to potential catastrophic failure. Many of Sigma’s products install directly into our customers’ existing assets, creating a “t it and forget it” experience that is second to none,” Manley asserts. With technological trends, such as rig systems automation, on the rise in the industry, many drilling companies will be relying on solutions providers to keep their operations up-to-date and to stay competitive in the industry. Sigma is on the forefront of these trends, developing equipment that is designed to provide high operational performance. “Designing and manufacturing equipment with [these trends] in mind has helped position Sigma as the exclusive choice for pulsation equipment,” Manley says. “Automation systems are built on predictable outcomes and performances. Our Charge Free technologies are designed to deliver just that, predictable performance.” In addition, Sigma’s innovative Charge Free Conversion (CFC) Kit directly targets pulsation dampeners and mud pumps, some of the biggest issues drilling contractors face. “Contractors found themselves in a constant ght with the mud pumps because the pulsation dampeners were inadequate to handle modern mud pump conditions. Sigma’s CFC Kit was designed to deliver outstanding performance across all operational pressures. The CFC Kit utilizes a dual energy mitigation system that not only uses compression for energy absorption, but also deploys a system for kinetic exchange,” explains Manley. The CFC kit resolves the issues that arise from using pre-charged bladders with standard pulsation dampeners. “The CFC Kit delivers predictable, high performance while eliminating costs and potential safety risks.” Although the oil and gas industry is slowly but steadily embracing technology and operational changes, the drilling sector of the industry still has a long way to go. “The oil and gas industry is rooted in traditions. With strong ties to traditions comes strong resistance to change,” states Manley. “Drilling contractors have dealt with the fact that pulsation control equipment simply hasn’t kept up with the increased demands of modern drill plans. If a broken leg is all you have ever known, you don’t take time to think about xing the leg,” Manley points out. As a result, Sigma is focused on promoting growth in the industry by helping its clients gain next level op-erational efciencies through technol-ogy. “As an industry, American energy has evolved and adapted to these challenges by utilizing new and im-proved technologies and Sigma rmly believes we will all be better for it. Sigma rmly believes if we assist our customers in becoming more ef-cient, more protable, and providing safer working environments for their employees, we are doing our job.”With a push for more modernization within the industry, it is crucial for oil and gas operators to maintain up-to-date drilling processes and, therefore, they need direct access to the latest technologies from oil and gas solutions providers to make or keep their operations current and efcient. “The mud pump is the heart and soul of drilling operations and having a smoothly operating pump system is key to achieving successful drill plans,” explains Manley. “We at Sigma feel we should be driving higher mud pump performance, thinking about better ways to clean up MWD signals, pushing the boundaries of what is achievable, and all of our initiatives are with one goal in mind: how do we make it better?”While the industry has been experiencing a wave of technology and software solutions, drilling processes remained unaffected for the most part, until recently. Oil and gas solutions companies, like Sigma, are revamping the way the industry operates. Sigma has made it their mission to support drilling companies by offering products that improve operational performance and existing equipment and promote safety and prots. Oil drilling processes will continue to be enhanced and equipment performance will continue to improve with companies like Sigma supporting the industry. “We pride ourselves at being the trusted partner and problem solver for our users,” says Manley. “We make available resources to help folks in the industry understand their equipment and how to improve its performance. Information is what helps the industry move forward and keep people safe, and it is what we strive to provide.” Photo courtesy of Sigma Drilling Technologies

Page 68

Oilman Magazine / September-October 2020 / OilmanMagazine.com66OILMAN COLUMNEric Eissler: Please provide some background as to what your company does and how you do it.Spencer Albright: MineralWare is an all-encompassing, cloud-based oil and gas asset manage-ment platform. We provide the lead-ing software for managing mineral, royalty and non-operated working interest assets. Our clients are able to see their position on a map, track revenue, ensure accurate payments, locate missing payments, access nationwide well, permit, and production data, and much more. Min-eralWare was founded with the goal of easing the management of oil and gas assets by automating and consolidating processes that traditionally are executed manually.EE: Could you provide a deeper dive into all the software you use to track mineral rights?SA: The MineralWare software package is designed to be a one-stop shop for all mineral and royalty management needs. With permits, nationwide production, revenue and corresponding analytics, clients can track the life cycle of their wells. Additionally, our robust land module allows clients to map and manage lease activity and provide a secure auditable location for their land documents.EE: As a newer company, what do you feel it was that got you out of the gate on the right foot?SA: From the beginning we knew, to be successful, we had to prioritize the client and the client’s experience. It is one thing to build powerful and robust software, but the secret to our success has been our focus on satisfying the needs of our clients. Our core values of S.E.R.V.E (Service, Excellence, Relationships, Virtues and Enthusiasm) are what we strive to live out every day in our client interactions. We have a retention rate of more than 98 percent this year which shows that we are on the right track.EE: Managing mineral rights is not an easy task. Are you connected to government databases to keep track of all the mineral rights? How does that work?SA: I feel land is changing hands or new boundaries are being demarcated, [so] how do you keep track of all the action? From the beginning we wanted to source our data directly from the government organizations populating it, so we spent a signicant amount of time and resources to connect to each producing state’s databases which allows us to provide up-to-date information for our clients. The rest comes directly from clients. If an asset is sold or gifted, they are able to make the modications to their owned interests directly on the platform.EE: Could you expound on how things go wrong (what are some common issues?) and how your services allow the user to handle the problems? SA: We have a diverse group of clients from family ofces, acquisition companies, universities/foundations to nancial institutions, so the issues vary signicantly. Some clients have little experience in the oil and gas industry and are starting with the need to understand what they own while other clients manage multiple complex accounts and need the ability to provide scheduled reports to shareholders, investors or their own clients. A common theme across the entire mineral ownership spectrum is lost or suspended revenue, commonly referred to as “suspended funds.” This can occur for a variety of reasons, some of which are as simple as failure to sign a division order or as complicated as title disputes. Using our nationwide fabric of well data and mapping technology, our software automatically identies areas of potential suspense and our team helps recover those funds for our clients and bring those wells into payment. It is important to stay organized as a mineral or royalty owner in order to make well-informed decisions when receiving correspondence from an operator or purchaser. Our software solves this problem by organizing and storing everything in a digital ling cabinet tied to interests and leases. MineralWare provides a solution to a wide variety of consumer needs.EE: What are some of the reasons I would want to use your service over another one?SA: The quality of software and customer service is something that differentiates us from the rest of the mineral management software packages on the market. MineralWare is continually launching new features developed in partnership with our Interview: Spencer Albright, President, MineralWare By Eric R. Eissler

Page 69

Oilman Magazine / September-October 2020 / OilmanMagazine.com67OILMAN COLUMNclients to ensure that as their needs change our software maintains the signicant value that it has from the beginning. Additionally, as mentioned earlier, we pride ourselves on the level of service we provide – if any of our clients have account issues, our client success team provides the perfect solution to any problem. Our team is continually working to push monthly updates in order for us to stay up-to-date on the latest market trends and consumer needs. In light of the level of customer service we provide, most of our competitors belong to larger tech conglomerates that are not solely focused on improving their solution. We are a standalone company that is only focused on improving our mineral management product, and it shows.EE: How has your software reduced paperwork? Does it make it more efcient in buying and selling rights?SA: Our software has automated time-consuming back ofce processes for all of our clients. With our platform, cli-ents receive lease expiration alerts, per-mit proximity alerts, rig location alerts, new well alerts, and other monthly summary alerts, along with much more. With the launch of our sister platform Energy Domain in the spring, users will be able to monitor areas of interest and quickly buy and sell directly. The listing process is completely streamlined with land and revenue data already being digitized in MineralWare and readily available in any format through our custom reporting feature.EE: Where do you plan to go from here? All software gets upgrades and updates; is there anything in the works that you can tell us about?SA: We work to improve our software every day! Our goal is to continue to add features that our current clients request, and future clients need. Our next big add will be non-op, joint interest billing (JIB) tracking and reporting and analysis to link with everything we already have. This will provide even more visibility for our owners and ALL of their interests. We have made a heavy investment in our development team and will be rolling out other products in addition to Energy Domain in 2021. REFCOMMVirtual Conference 2020THE WORLD’S PREMIERE DELAYED COKING CONFERENCE2-6 November 2020 |part of thegroup®GLOBAL

Page 70

Oilman Magazine / September-October 2020 / OilmanMagazine.com68OILMAN COLUMNThe energy industry is very cyclical and, while companies should take advantage of economic ups and market changes that give them an edge, it is imperative to keep in mind that a downturn will follow. It is easy to focus on growth without having a Plan B, which causes concern as companies depend heavily on commodity prices and market factors that fall outside their realm of control. During the most recent downturn of 2020, we have been in the trenches alongside oil and gas leaders as they scramble to stay protable. While production scales back, highly success-ful and industry-leading operators are altering their strategies and shifting their mindset with a determination to crush costs, streamline operations and re-evaluate their technology landscape. Our consulting and back ofce/IT outsourcing rms, EAG Services and EAG 1Source, were founded on the premise of alleviating unique business challenges upstream and midstream oil and gas companies inevitably face. We’ve been in the business for 17+ years and have served as a “source of relief ” to our clients, weathering the highs and lows of multiple economic downturns, transforming businesses to thrive after bankruptcy, and effectively collaborating with leadership to maxi-mize human capital, all while working within parameters in respect to life’s most precious commodity – time. We know every corner of the oil and gas business through rsthand exposure, examining hundreds of unique business cases and various business structures during distinct periods of the economic cycle, in addition to gaining deep knowledge of industry-leading systems and best practices. As we help more clients reach their goals, our team observes and reects on the key factors that drive the most favorable outcomes. In its simplest form, having the right technology, processes and people in place contribute to the highest levels of long-term success, despite unpromising industry changes. It is a common fear that, in the midst of a downturn, investing in technology uses company money frivolously, could be extremely time-consuming to implement, and comes with a signicant learning curve, resulting in additional stress on an already struggling organization. Although these fears are valid, they can cause industry leaders to shy away from adopting new technology (or postpone until later) and instead focus on short-term, survival-mode xes. However, EAG challenges this line of thinking, along with addressing the common concerns associated with adopting technology. As industry leaders and experts, EAG encourages companies to lean-in to technology so that they can survive any industry change and position themselves for long-term success.Common Concern #1: Technology is Too ExpensiveIt only seems natural that a company’s rst inclination during an economic downturn is to stop spending completely. While there is a dire need to shrink spending, playing it too safe can end up costing companies more in the long run. The secret to survival is streamlining operations with better technology that offers automation and integration so that precious time is channeled toward more productive activities. Oftentimes, employees within oil and gas companies do not have the expertise or bandwidth to diagnose all the operational pain areas and, even if they do, chances are they do not consider all the implications and risks associated with potential outcomes. Instead of being focused on their roles, they end up wasting valuable time assessing, researching and planning.Companies need a third-party to deeply evaluate their current operations, technology landscape, organizational Leveraging Technology to Crush Costs and Concerns By Elizabeth GerbelImage courtesy of EAG Services

Page 71

Oilman Magazine / September-October 2020 / OilmanMagazine.com69OILMAN COLUMNstructure, long-term goals and budget, considering all moving parts, and then offering a solution that provides the best t. The right solutions recommended in a fraction of the time can save companies thousands of dollars up front, and once the system(s) is implemented, the technology will signicantly improve operations with automation, integration, data accuracy and consistency.Common Concern #2: Implementing New Technology Takes Too LongHistorically in the oil and gas industry, completing software implementations and integrations was like pulling teeth. However, we are now living in a time where a slew of resources is available to provide support and expertise from project start to post-implementation support. Oil and gas leaders should select resources that have a proven track record of delivering successful implementations and integrations over several years (and during various economic cycles) that have both the technical and functional knowledge needed to extract data from legacy systems (despite the form, e.g. spreadsheets, access databases, etc.), cleanse the data, and seamlessly convert it to new systems. Additionally, prior to beginning a new project, leaders must understand the project plans in detail with outlined responsibilities of each party. An important Key Performance Indicator (KPI) in measuring success is how well time, which becomes even more scarce during an economic downturn, is being managed. Teams must commit to a timeline and go-live date with daily status updates showing tangible progress and ensuring milestones are being met. With the right plan and partner, employees in oil and gas companies only need to contribute a fraction of their time to project activities versus having to dedicate hours every week with the risk of not nding the right solution, selecting the wrong vendor or not addressing every aspect of their business leaving gaps in their long-term plans and goals. This will eventually cause greater work and additional spending in the future. Although there is some upfront cost required in a partnership, the cost of inaction is greater than the cost of change.Common Concern #3: There is a High Learning Curve Associated with Adopting New TechnologyIt is rather difcult to change the behavior and habits of one person in an organization, so envisioning an entire organizational change in a short period of time seems like a large feat. Oil and gas leaders must be aware of this phenomenon and skillfully analyze and take personal interest in the entire organizational structure, zooming into what a “day in the life” looks like for their employees. In the initial phases of a software implementation project, all current business processes should be mapped out as the “current state” and then, as the teams discover additional pain areas, desired “future state” processes should be outlined. Once legacy data is migrated to the new selected system(s), employees should participate in User Acceptance Testing (UAT) which will allow them to get their hands into the new system(s) and validate that their data is accurately displayed. Companies also should take advantage of vendor demonstrations offered by software companies, which give employees the opportunity to ask questions and collaborate with other members of their organization well before the projected go-live date. Employees and stakeholders should also ask for “staging” access to the system(s), giving them plenty of time to become familiar and test before go-live. This strategic approach in engaging employees at every point of the implementation project is key in reducing the learning curve as they will become naturally procient in using the system(s) by go-live.Proactive not ReactiveEAG Services and EAG 1Source guide oil and gas leaders to take a proactive rather than a reactive approach to industry changes by leveraging technology and industry best-practices. By leaning-in to technology, companies benet in two-fold by cutting costs while becoming more resilient during a downturn and positioning their companies for scalability and future success. Elizabeth A. Gerbel founded EAG Services in 2003 with a vision to establish a unique consulting organization, one with deep industry knowledge to effectively partner with oil and gas clients and provide superior and cost-effective services.Founder and current chief executive ofcer of EAG Services and EAG 1Source (a full-service IT and business process outsourcing rm), she is responsible not only for the company’s strategic leadership and vision, but also for providing guidance, direction and expertise to clients and team members.Gerbel has over twenty years of ERP, land management, production management, and custom IT solution design experience working with Fortune 500 and mid-size E&P independents. She often acts as a thought leader on EAG’s engagements assisting with innovation strategy, delivering presentations on technology trends, and keeping abreast of innovations to support client initiatives. Under Gerbel’s direction, EAG has grown to become the trusted, independent business and technol-ogy solutions source for the energy industry.

Page 72

Oilman Magazine / September-October 2020 / OilmanMagazine.com70OILMAN COLUMNTech, tech and more tech. It only goes up from here and, since the dawn of the Internet revolution in the mid-90s, the world has been riding the tech elevator beyond the limits of our atmosphere (thanks, Space-X). Technology and software development have been targeting the oil and gas industry since the 2015 downturn and have taken this industry, which is known for its conservatism and low adaptability, to new heights by using advanced software to remediate many challenges that have plagued the industry. Leading the WayConocoPhillips pushed the gas pedal further by adopting a new low-code approach to software development offered by Mendix. This approach to software engineering uses pre-built visual components and functions, so that developers can quickly assemble applications to meet business requirements and drastically reduce the time to market in the software development lifecycle. Manager, Architecture and Governance of Product Marketing at Mendix, Jon Scolamiero took time out of his busy schedule to sit down and talk with OILMAN Magazine about low-code software development and its uses in the oil and gas industry. “Mendix is an open platform created so that tying together a variety of modern and legacy systems is faster than traditional development,” Scolamiero explains. “In addition, we strongly encourage our customers to adopt [a] modern Agile approach to creating new solutions, including leveraging DevOps across silos as much as possible.”He went on to say, “ConocoPhillips is using Mendix far and wide throughout its entire organization and has realized enough value to make an enterprise agreement attractive for its organiza-tion. In addition, Mendix is able to be a key part of nearly any software solution in the oil and gas industry, including eld service, engineering scenarios, res-ervoir, geology, core business functions and more.”Drag and Drop Software Development? Not so FastMany of you might be envisioning a reduced IT footprint or business execu-tives dragging and dropping apps on the y, but this is not the case. Scolam-iero provides better insight into Mendix by stating, “While we do have a Citizen Developer oriented IDE [Integrated Development Environment, which is where developers build software and write code], Mendix Studio, we also have an IDE targeted for more techni-cal developers, all the way up to the hardest of the hardcore. In fact, hard-core developers tend to really like our platform for the productivity we give them, while always allowing them full control, including pulling in code when it’s needed.” As Scolamiero points out, IT is still involved, and it’s not for someone who knows nothing about development to drag and drop buttons and widgets to create a Frankenstein application that is reminiscent of Angel Fire websites from the late 90s. Anyone remember some of those drag-and-drop monstrosities? Coming to Your IndustryGetting to the core of why and what a low-code IDE was created for, Scolamiero explains, “Mendix was developed for all industries to facilitate quicker software development,” which is key. Most users do not realize that the websites and applications they use on their computers and phones every day took a lot of effort by many people to build the app nor do they realize that a particular feature they like might have taken months of development to create. While it might only take seconds from the click of a button until the Low-Code Software Development to Propel Oil and Gas Tech Higher By Eric R. EisslerPhoto courtesy of scyther5 – www.123RF.com

Page 73

Oilman Magazine / September-October 2020 / OilmanMagazine.com71OILMAN COLUMNdesired data is displayed, that entire process was not developed in a week or a month, it probably took several months with many people working on it in various design and functionality iterations. Scolamiero continues, “Our original goal was to mend the growing gap between business and IT. We also care about our customer’s specic business verticals, and we are actively working on industry specic business capabil-ity accelerators. In addition, we have a whole host of partners, from the big-gest names to industry niche vendors, who work with us to do the same.”The Start of Foundational ChangeThe tech industry changes quickly due to software updates, newer versions, new technologies, dealing with legacy dinosaurs, and organizations have to keep up. “We believe that low-code is ultimately the next evolution of software solution development and, even though we are enterprise ready, there are so many areas where we can evolve the industry,” says Scolamiero. “Low-code isn’t a niche technology, but a foundational one, and one we see changing the world in big ways.”Devil’s AdvocateThat being said, we might be seeing a major change coming to the world of software development over the next few years as more low-code applica-tions are built to speed the time to market. It could be that, while business leaders rejoice, software developers may oppose low-code development, as developers might feel they can easily be replaced. It’s important to remem-ber that an application is only as good as the team that develops it and keeps it updated with current technologies. Many times, low-code platforms lock the development team in and over time are not scalable or easily updated. However, developers, fear not; you will not be replaced! A platform like this enables you to quickly put together something in the Cloud and then con-nect services the old-fashioned way. The Reality of the Situation What this offers the oil and gas industry is a fast and easy way to get caught up on the tech curve. While many have lagged behind, the low-code platform can provide the IT departments of oil and gas companies a quick solution to catch up and build out simple applications to get started and then bring in the pros to add on and expand upon the base. This will allow oil and gas companies to better position themselves against each other and thrive in a world already dominated by high-tech-led companies. Not all the software has to come from a third party, which will allow companies to build their own software to t their needs on a budget and be completely in control of their own source code, thus not relying on third-party contractors. The low-code platform is a stepping stone for the oil and gas industry to get into the game of technology and write programs that are specic to their needs. SUBSCRIBE TODAY!Get the Oil & Gas news and data you need in a magazine you’ll be proud to read. To subscribe, complete a quick form online:OilmanMagazine.com/subscribe Editor@OilmanMagazine.com (800) 562-2340 Ex. 5

Page 74

Oilman Magazine / September-October 2020 / OilmanMagazine.com72OILMAN COLUMNFive major players – Kinder Morgan, Williams Companies, ONEOK, Energy Transfer, and Plains All American – each with extensive pipeline networks that zigzag across the country, dominate the midstream oil and gas segment in the U.S. Numerous regional companies also facilitate the intricate delivery of petroleum products on a smaller scale.The downstream segment relies on the pipeline operators to deliver crude oil, natural gas, carbon dioxide, and other rened petroleum products for processing at their facilities, which are then sold to end users. Likewise, the upstream market also utilizes the midstream segment to transport crude products to downstream renery and processing facilities. The midstream oil and gas segment also consists of fuel transportation via trucks, rail, vessels, and marketing activities on the retail and commodity trading side of the business. When performed well, the midstream segment is a perfect middleman.As in any business, there are unforeseen issues that arise or, in some cases, are self-inicted. Safety is the primary concern for all operating segments in the oil and gas industry; the midstream market is no different. Although a vital piece in the value chain that moves the industry along, pipelines often have a more dramatic connection in the consumer eye as their infrastructure snakes across the country, sometimes in the middle of neighborhoods, cities and towns, and spanning thousands of miles. What happens when there is a pipeline leak? An explosion? These concerns are always at the forefront for all involved in the midstream market.Over the years, midstream companies have experienced their share of ire from consumers opposing expansion of pipelines, in addition to leaks, explosions, and even fatalities because of an accident from their terminal, processing facility or pipeline segment. It must be understood that pipelines are a vital component to maintaining a robust energy market that benets all citizens, but how do we balance the interests of midstream expansion with the interests of consumers who live near pipeline infrastructure? Many that work in the oil and gas industry admit the balance is tough. On June 3, 2020, residents near a Kinder Morgan gas plant in Synder, Texas, had to evacuate because of an explosion at the facility or “are burp” during a process of releasing liquid. In this case, no one was injured, and the incident was contained quickly.ONEOK, the Tulsa, Oklahoma-based midstream provider, incorporates an Environment, Safety and Health (ESH) management system into its business operations to ensure a safe and environmentally-friendly framework for employees and external stakeholders. It is an 11-part initiative that gives everyone a voice in how the company conducts business to maintain a zero-incident culture. It is a bold commitment and, if executed well, it mitigates risk, eliminates incidents to employees and the public, and solidies the company’s license to operate in the public domain.All the major players in the midstream segment have some form of sustainability reporting the public can view on their websites, and a culture of safety messaging, including the 811 “call before you dig” initiative. ONEOK is fully committed to ESH transparency by allowing the public to Pipelines: A Vital Piece of the Puzzle in the Oil and Gas Stream By Emmanuel SullivanPhoto courtesy of Shvadchak Vasyl – www.123RF.com

Page 75

Oilman Magazine / September-October 2020 / OilmanMagazine.com73OILMAN COLUMNdownload a customized sustainability report.Like ONEOK, Plains All American, a Houston-based pipeline, marketing and storage operator, has an extensive sustainability collection that lays out its commitment to safety, environment, communities, employees, and its accountability, ethics and integrity mandates. The last major oil spill the company had was on May 19, 2015, off the coast of Santa Barbara, CA. The California Ofce of Spill Prevention and Response estimated that over 100,0000 gallons of crude oil discharged into the environment and 21,000 gallons reached the Pacic Ocean. In 2019, the company was ned $3.35 million and paid for the cleanup, estimated at $335 million. “We take our responsibility to safely deliver energy resources very seriously, and we are committed to doing the right thing,” the company said in a statement. “We are sorry that this release happened, and we have and will continue to work hard to re-earn the trust of area residents.”Part of the business process many midstream companies encounter is expansion and how to safely expand with approval from the many stake-holders involved, ranging from state regulators and politicians, to com-munity groups, environmental activ-ists and landowners concerned about eminent domain. Pipeline expansions are contentious, such as the well-known Keystone Pipeline, which was denied a request on July 7, 2020, to continue construction by the U.S. Supreme Court. However, on July 15, 2020, Dakota Access Pipeline (DAPL), another popular interstate pipeline, was allowed to continue operating by the U.S. Court of Appeals for the District of Columbia. A lower court ordered the pipeline owner, Energy Transfer, to shut down the line until a thorough environmental impact review was completed. Like Keystone, DAPL has been fraught with objec-tions from protestors, who claim that the line should not be allowed to build under South Dakota’s Lake Oahe, a water source for the Standing Rock Sioux tribe. Pipeline companies continuously come under heavy re from local communities and environmental groups opposed to expansion in their communities. The Atlantic Coast Pipeline, a 600-mile pipeline that was planned to cross 14 states, was canceled July 5, 2020, by the operators, Dominion Energy and Duke Energy, after investing $3 billion in the project. The operators cited continued uncertainty and anticipated delays in the decision to cancel the project. The original cost to build the pipeline was $5 billion and, according to Dominion and Duke, the price tag had increased to $8 billion. “This announcement reects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States,” Dominion CEO Thomas Farrell, II and Duke Energy CEO Lynn Good said in a statement. “Until these issues are resolved, the ability to satisfy the country’s energy needs will be signicantly challenged.” This comes even after the pipeline partnership received a green light to proceed on June 15, 2020, by the U.S. Supreme Court.Over the years, M&A activity in the midstream segment has been a routine occurrence with several acquisitions between all competitive players. In September 2015, two large companies in the midstream market, Williams Companies, based in Tulsa, Oklahoma, and Energy Transfer, based in Dallas, Texas, agreed to merge. The merger was scheduled to close in June of 2016. The combined company would have surpassed its rival Kinder Mor-gan in assets and revenue. Five years later, both companies are still battling over who should pay the breakup fee arising from the muddled deal. OILMAN published a longer article regarding the crippled deal, which included source material from a 33-page Market Institute report published in April 2020; however, a Williams Companies’ law rm demanded OILMAN remove the article, saying the report contained incorrect information. I contacted the report author, Charles Sauer, and he stands by his in-depth research regarding the failed merger. As an advocate for the oil and gas market, we regularly report on emerging technology shaping the industry, new and improved products and services, M&A activity, nancial news, and people making a difference. Several media organizations cover the same oil and gas topics. Many of those organizations, such as Bloomberg, Wall Street Journal, The New York Times, The Dallas Morning News and The Houston Chronicle, also reported on the Williams Companies and Energy Transfer subsequent legal battle. In the end, as a media voice for the oil and gas industry, we were disappointed to receive a demand letter from a major midstream operator. ADVERTISE WITH US!Are you looking to expand your reach in the oil and gas marketplace? Do you have a product or service that would beneﬁt the industry? If so, we would like to speak with you! We have a creative team that can design your ad! Call us (800) 562-2340 Ex. 1 OilmanMagazine.com/advertise Advertising@OilmanMagazine.com

Page 76

Oilman Magazine / September-October 2020 / OilmanMagazine.com74OILMAN COLUMNThe energy industry today understands the value of technology. Innovation and sensible investment can rapidly cut operating costs and reduce the risk of accident. This is especially true in the offshore sector, which relies on technology and development to make progress and must deal with higher cost pressures than most of its onshore competitors. For high risk/high yield deepwater areas, longer term returns have become progressively more important. Many of the most ground-breaking innovations of recent times that have the greatest impact on operators can be grouped under the banner of “digitalization,” leveraging data to deliver better performance, lower costs and reduced risks. Data driven innovation has always relied on connectivity to function in remote offshore locations. The same can be said of a lot of crew welfare initiatives, which require a stable way to communicate with shore-based staff, family and friends. The rapid technological progress we’re seeing today means that many of these new solutions require robust and reliable connectivity that can deliver high-throughput, low-latency broadband.Operators are nding that traditional connectivity solutions are no longer effective, and this is a trend that will accelerate as better technology is mainstreamed. Oil extraction is moving to more remote regions, especially offshore where operations are moving farther toward deep-water areas. Installing cables to deliver connectivity is rarely a practical option, either from a cost perspective or often from a technical point of view, while other terrestrial options for near shore rigs can’t provide the bandwidth required to take full advantage of digitalization. Satellite connectivity bridges this gap. Some modern satellites, especially those part of Medium Earth Orbit (MEO) constellations, are able to provide speeds and bandwidth comparable to onshore bre optic connections, but without costly and difcult to maintain infrastructure requirements. Given these benets, it’s no surprise that satellite communications have become an increasingly important tool for the energy industry. Connectivity Drives Efciency The energy industry has long recognized the cost and efciency savings that connectivity can bring. Satellite connections were routinely being used to transmit data to onshore specialists for fast, expert analysis by many operators as early as 1983. That represented a small amount of data being transferred slowly by today’s standards, but the benets were clear: projects could use onshore experts to control more parameters of an operation and deliver greater efciency. As speeds and bandwidth have improved since then, communication equipment has also improved. Reliable HD video calling alongside other tools has enabled more management work to routinely be done from onshore locations. While companies must pay a signicant premium for offshore staff salaries, safely reducing the number of full-time offshore personnel needed has become a key cost saving strategy. In more recent years, the emergence of the Industrial Internet of Things (IIOT) across industries has put even greater demands on satellite connections. In offshore projects, technologies that can seamlessly provide opportunities to gain insights Satellite Connectivity is Key for Driving Offshore Efficiency, Now More Than Ever By Simon Gatty SauntPhoto courtesy of ismagilov – www.123RF.com

Page 77

Oilman Magazine / September-October 2020 / OilmanMagazine.com75OILMAN COLUMNon every aspect of an operation are understandably in great demand, and modern sensors integrated into all aspects of a rig, drill, and surrounding infrastructure are delivering data to an edge and cloud-based processing centres with this in mind. Through these sensors, operational technology is becoming increasingly connected. Systems that previously operated in isolation now feed detailed information about every critical parameter from these sensors to onshore IT systems. Microsoft Azure based cloud computing applications have enabled companies to process and analyze that data more effectively and cost-efciently onshore. I know this because I’ve seen it myself. As a partner of Azure ExpressRoute, SES provides global reach and ber-like high-performance to Azure customers via its complete portfolio of Geostationary Earth Orbit (GEO) satellites, O3b MEO constellation, global gateway network, and core terrestrial network infrastructure around the world.Given the particularly direct connection between efciency savings and prot in the industry, being able to utilize information to improve equipment or drill settings and provide lower risk through predictive maintenance have a big impact. Some are using this equipment to go even further, implementing “digital twins” of their projects to provide even more insight on equipment wear and maintenance. This increased level of automation is having a particular impact today, in the midst of the global COVID-19 pandemic. As companies are requiring personnel to quarantine for 14 days before gaining access to offshore locations, to ensure the safety of staff aboard the installation, it has become even more logistically challenging to send staff to these remote locations. This is resulting in only absolutely critical personnel being granted access, and these connectivity-enabled automation solutions taking a particular spotlight. These improvements have been mirrored in crew welfare. Today, operators use bespoke health monitoring equipment that can provide an onshore clinician with more information about a crew member’s health, including from scans, blood tests, and other connected monitors. One of our maritime clients has taken this to the next level already, fully implementing remote viewing for a compact digital scope and CT scanner. Through this, it is able to provide onshore specialists with information from scans that would usually require an onshore facility and samples that would usually have to be transported manually. Utilizing this, specialist pathologists are able to remotely diagnose a raft of complex, life changing or deadly diseases. The Rise of MEOThis level of connectivity and data use has been enabled by rapid developments in satellite technology. Until recently, the offshore industry predominantly used GEO satellites to deliver remote Internet. These GEO satellites provide global reach and, as part of a hybrid satellite ecosystem strengthened by the high speeds and bandwidth of MEO constellations, ensure uninterrupted coverage and stability. This hybrid architecture helps overcome high latency, or the time it takes for a signal to be passed from a rig to a satellite and then back to Earth. However, many of the next-generation technologies available to the offshore industry have specic latency, throughput and capacity requirements. Data use on offshore vessels has increased, while many applications rely on its near real-time transfer to provide accurate parameter tracking and remote changes efciently. This all changed when the O3b MEO constellation became operational in 2014. With more advanced satellites positioned closer to Earth, this constellation has been able to provide low-latency, high-throughput connectivity, enabling the rapid shift we have seen over the last few years. The step change can be seen in the numbers. Before MEO satellites became the industry standard, aggregated bandwidth to rigs stood at between two and ten Mbps. Today’s MEO constellations can provide scalable aggregated bandwidth in the hundreds of Mbps, meaning that more data can be transferred more quickly as other technologies have demanded greater data use. You can see the same story in regard to latency. O3b satellites have a latency of up to 150 milliseconds for a round trip data transfer, which is often comparable with the terrestrial networks in parts of the world where many of the rigs are based, compared to 600 milliseconds for a geostationary satellite. Latency sensitive applications include staff facing applications like videoconferencing services, where the delays can be acutely noticeable, but they can also include automated services. The O3b MEO constellation is powering connectivity for four out of the six oil and gas supermajors today in remote regions across Brazil, West Africa and the Gulf of Mexico. Looking AheadHigh-speed, reliable and scalable con-nectivity solutions are vital for enabling digital solutions. Demand for real-time data is growing, and it is critical that the offshore industry has the tools required to make best use of the data revolution for its individual operations.The next step change is due to come in 2021 in the form of the upcoming O3b mPOWER constellation. This new constellation is set to provide higher speeds, but more importantly greater scalability and exibility. Increasing low latency speeds and bandwidth have driven the development of remotely operated unmanned platforms, further cutting Continued on next page...

Page 78

Oilman Magazine / September-October 2020 / OilmanMagazine.com76staff numbers and driving efciency. These are entirely reliant on data connections, and faster speeds make this possible in more locations. With O3b mPOWER, thousands of beams will be available per satellite. This means that operators can get high quality connections more reliably in more locations that would have been impossible before. It also means that good connectivity is no longer the preserve of xed platforms as beams can be dynamically allocated, allowing offshore vessels to more efciently leverage bandwidth when and where it’s needed. Delivering more cost-efcient extraction directly impacts prots, and recent market conditions have highlighted just how much cost efciency improves resilience to market shocks. To do this, operators must always be using technology that can enable cuts in operational expenditure – either on its own or by enabling a new suite of technologies. Digital solutions are here and will continue to grow over the coming years. To deliver efciency and better crew welfare, operators must always plan carefully to ensure that they have the appropriate connectivity solutions for their needs. Those that fail to plan will be left more exposed to future market shocks and unable to implement cost-cutting technologies. Simon Gatty Saunt is currently vice president of Sales, Global Ser-vice Providers at SES Networks, a provider of global managed data services. He has held a number of senior posi-tions in the satellite business for the past 20 years. This includes over 15 years at SES, which most recently included vice president of Sales EMEA prior to his current role, where Saunt’s team is responsible for the management of many SES key accounts, which include many of the world’s largest cross segment global service providers.Prior to joining SES, Saunt held several senior sales positions, including four years at Globecast, an Orange company, where he was responsible for broadcast product and business development across Northern Europe and Scandinavia, which included launching a number of satellite multiplexes on the U.K. Sky platform. OILMAN COLUMNSUBSCRIBE TODAY!Get the Oil & Gas news and data you need in a magazine you’ll be proud to read. To subscribe, complete a quick form online:OilmanMagazine.com/subscribe Editor@OilmanMagazine.com (800) 562-2340 Ex. 5

Page 79

Oilman Magazine / September-October 2020 / OilmanMagazine.com77OILMAN COLUMNContinued on next page...The discipline of oil drilling is one of the most inherently risky manu-facturing industries worldwide. From the heavy machinery involved, to the isolated locations and long driving distances, risk presents itself under many different guises in the oil indus-try. Though the sector’s relationship with health and safety has tradition-ally been, shall we say, mixed, there’s no doubt that industry-leaders are making more of an effort to prioritize those working within the industry.It will never be an entirely safe indus-try; however, it can be made as safe as possible and that’s what the industry is striving for. This drive for greater standards of safety is being reected in recent industry statistics. According to the International Association of Oil & Gas Producers (IOGP), annual fatalities within the industry decreased between 2017 and 2018, down from 30 to 27 (with more hours being worked, on average, on top of that).Henry Berry is the director of asset-backed IPO company, Tristone Holdings Ltd. He’s been looking at the risks involved for professionals in the oil industry and how industry leaders are combating them. Here, he discusses the potential hazards faced by workers and how the industry is improving conditions with new technologies, new policies and more proactive maintenance.Unique RisksWhether onshore or offshore, the isolated nature of most oil rigs brings with them their own set of unique risks, challenges and difculties. Whereas in some industries, health and safety have become associated with merely a box-ticking exercise, in the oil and gas industry this couldn’t be further from the truth. Failure to meet industry standards for health and safety can lead to catastrophic circumstances. Even the most cursory of searches online will reveal countless rig disasters from the past half century, including the Deepwater Horizon spill (2010), the Piper Alpha disaster (1988) and the Ixtoc I oil spill (1979). The risks range from heavy machinery to ammable chemicals and often the dangers stem from a combination of the two.Fire and ExplosionsFire is a very real danger to oil rigs, both on land and on the water. There’s an abundance of ammable chemicals present, such as hydrogen sulde, as well as the risk of thermal and electrical res breaking out. Thermal res manifest most commonly as a result of sparks from the grinding and rubbing of heavy machinery. Electrical res are similarly dangerous and usually arise from a lack of adequate maintenance.Regular maintenance is essential, therefore, in preventing res from ever breaking out. It’s recommended, for instance, that re dampers be stroked once a month to conrm their effectiveness. Beyond this, training is imperative. Educating employees and making sure they’re knowledgeable of (and that they subsequently respect) safety regulations is crucial in the mitigation of re accidents. Better trained workers are less likely to leave something lying about the rig which may spark and ignite.Prevention is certainly better than cure in terms of combatting res on oil rigs because once a blaze has taken root, it spreads very quickly. The best setup is a three-piece alarm system, combined with re water systems and water pumps, to tackle the ames. Signals triggering an emergency lockdown are also critical in prevent-How Safety Has Become a Priority for the Oil Sector By Henry BerryPhoto courtesy of Pixabay

Page 80

Oilman Magazine / September-October 2020 / OilmanMagazine.com78OILMAN COLUMNing the worsening of the re. We’ve seen, in recent months, the importance of Personal Protective Equipment (PPE) in a medical context; however, PPE is vital in any industry where such risks are present, and it’s pivotal that employees are given the appropriate equipment in case of a re.As if these rigs or oil wells needed any more hazards, we’ve yet to mention the presence of large amounts of compressed gas stored, on-site, by oil production companies. The high levels of pressure mean than any sort of leakage can very easily cause an explosion. Thankfully, new guidelines dictate that at least one member of staff has to be on-site at all times in order to monitor the levels of stored gas and take action should an emergency unfold.Vehicle Collisions and FatigueHighway accidents are among the most common cause of casualties in the oil industry. Some studies even suggest that as many as 40 percent of industry fatalities stem from road accidents. With onshore wells more often than not being located in highly-isolated areas, delivery drivers are required to drive inordinately long distances at a time. The associated risk of fatigue is therefore very high and presents a huge risk on the highways, both to the driver who is fatigued and to other road users. Yet many drivers are unaware just how dangerous driving tired can be.Better education is needed as well as journey planning which is more accommodating to the drivers. One such educational resource is fact sheets; easy-to-digest and distribute information which can easily be translated into other languages. It’s worth noting that there are many drivers for whom English isn’t their rst language and so multi-lingual resources are essential. The onus is very much on the drilling companies to factor in driver tiredness when they’re setting their deadlines and targets. A more rested eet of drivers equals a safer eet of drivers, and that’s something that needs to be prioritized moving forward.Caught-In/Caught-Between/Struck-By IncidentsObviously, all accidents on an oil site are awful, though there’s something particularly nasty about caught-in, caught-between and struck-by incidents. Denition-wise, they’re all fairly self-explanatory; they can be thought of as incidents whereby a worker comes into contact with (or is trapped/pinned by) moving parts, heavy machinery, high-pressure lines or any other piece of drilling equipment.Such incidents are mitigated by bud-dying up, never working alone and following the (extensive) industry guidance. What some may see as bu-reaucracy, or red tape, is of paramount importance in keeping workers safe. There’s a reason that these regulations are in place and it’s a fairly obvious one. Because when corners are cut in this regard, accidents happen.Mental HealthSomething which has gained increasing prominence over recent times has been the importance of mental health. The oil industry is traditionally male-dominated. Men (generally speaking) have a harder time opening up when they’re struggling mentally than women do. This ends up being a potent combination, when looking at statistics, and is one of the reasons the oil industry has a high rate of suicides. Long stints away from loved ones, physically demanding work and an intensely pressurized work environment aren’t things one would generally deem conducive to positive mental health. There’s a long way to go on this front, though conversations are starting to be had, and oil production companies are beginning to put more frameworks in place to help deal with their workers’ mental health.How Is the Industry Keeping its Workers Safe?We’ve established that a large part of industry safety revolves around the themes of education and proactive maintenance. Another way in which the industry is being made safer is through the adoption of modern tech-nologies. These range from the seem-ingly simple to the much more com-plex. GPS technology, for example, is being used so that on-site workers are more easily located. If, for whatever reason, a worker happens to be on their own and an accident befalls them, they can easily be located and aided. This will save crucial time, especially if the accident is at all severe. In these circumstances, minutes can prove the difference between an amputation and keeping a limb, or even between life and death. Dramatic though this may sound, unfortunately it’s the truth. Drone technologies are proving equally effective in keeping workers safe. Drones are providing a exible and cost-effective way to carry out on-site inspections. This means that employees will no longer have to get up close and personal with harmful gases, potential leakages or conned spaces.The oil sector is far from perfect when it comes to health and safety. However, it’s a darn sight better now than it was even ten years ago. Oil companies are making more of an effort and, whether this is from a place of true altruism or simply a fear of litigation, so long as workers are being made safer, that’s what matters most. Henry Berry is a director at Tristone Holdings, an energy company based in the U.K. with a primary focus in the U.S. It nds, develops and produces essential sources of energy and its portfolio includes high-quality conventional oil and natural gas assets in the top U.S. onshore plays. Currently, it is raising capital to acquire and expand its energy base, specically in the oil and gas sector. For more information visit tristoneholdings.com.

Page 81

Oilman Magazine / September-October 2020 / OilmanMagazine.com79Honoring Innovation During World Energy WeekIn celebration of World Energy Week on Oct. 5-9, the National Inventors Hall of Fame® is proud to celebrate 2020 Inductees James Abercrombie (1891-1975) and Harry Cameron (1872-1928), who developed the blowout preventer (BOP). James Abercrombie, a Texas oil driller, and Harry Cameron, a machinist, designed the world’s rst reliable blowout preventer (BOP) to successfully contain catastrophic well blowouts — the dangerous, uncontrolled release of oil or natural gas caused by the failure of a pressure control system. Their mechanism allowed operators to close wells, control pressure during drilling operations, prevent surface oil accumulation at drilling sites and most importantly, save lives.Harry CameronBlowout Preventer (BOP) US Patent No. 1,569,247 Inducted in 2020 Born July 9, 1872 - Died May 31, 1928Born in Indianapolis, Cameron studied architectural and me-chanical engineering at Christian Brothers College (now Uni-versity) in Memphis, Tennessee. After moving to Dallas, he worked at a cement company for a year before working in the oil elds and soon established himself as a skilled machinist. In 1920, as partners in Cameron Iron Works, Cameron and Abercrombie developed Abercrombie’s idea for a “ram-type” blowout preventer using hydrostatic pistons (or rams) to close on the drill stem and form a seal against the well pressure.The team led for a patent on their Type MO BOP in 1922, and soon after, Cameron led a patent on an improvement to the original design to help eliminate leakage. Cameron would earn four U.S. patents in his lifetime.Cameron and Abercrombie’s work revolutionized the oil and natural gas industry, and the BOP became a safety standard. Although modern designs differ from their original design, blowout preventers continue to protect drilling rigs, workers and the environment from expensive, dangerous blowouts. The pioneering concept of rams closing around a drill pipe is still used today.Cameron Iron Works evolved over the decades into Cameron International, which became part of Schlumberger Ltd. in 2016. Today, Cameron is a leading manufacturer of oil and gas pressure control and separation equipment, and it remains one of the leading providers of BOPs in the industry.Source: National Inventors Hall of FameJames AbercrombieBlowout Preventer (BOP) US Patent No. 1,569,247 Inducted in 2020 Born July 7, 1891 - Died January 7, 1975One of 13 children, Abercrombie spent his early years working on his family’s dairy farm before getting involved in the oil business. In 1920, Abercrombie and Cameron formed Cameron Iron Works. There, the two developed Abercrombie’s idea for a “ram-type” blowout preventer that would use hydrostatic pistons (rams) to clamp the drill stem and create a seal against well pressure during a blowout.Before the invention of the BOP, oil wells were left to “blow out” after tapping to suf-ciently reduce pressure for capping. Today, when installed on a wellhead, the BOP allows for complete control of pressure during drilling. Patented in 1926, Abercrombie and Cameron’s “Type MO BOP” could withstand up to 3,000 pounds per square inch (psi), then an industry record.Abercrombie earned a total of 30 U.S. patents and became one of Houston’s most generous philanthropists. His many contributions include sizable donations to Rice University and the Texas Children’s Hospital. Support for this hospital would continue through the James S. Abercrombie Foundation, which was established in 1968.James (top) and Harry (bottom)

Page 82

Oilman Magazine / September-October 2020 / OilmanMagazine.com80OILMAN COLUMNTo continue with our young professional series, our talk today is with Kim Salinas, who is a bank engineer with ING. Kim is an active participant with the local SPE chapter and serves as a chairman. Alan Alexeyev: Tell us a little bit about your current position and what you do, as well as how you found a job. Kim Salinas: I am a bank engineer with ING Capital. My role entails valuing an E&P’s asset as well as their associated facilities for the sake of lending purposes. This type of lending is referred to as RBL – reserve based lending and the loans are called revolvers since they essentially act like a credit card in that you have a set limit and can draw down and repay on it within the tenor of the loan. In this role, you get to evaluate multiple companies’ assets and meet with the management teams as you go through your analysis. I found this job through happenstance as I was interested in a role in upstream; prior, I was in a downstream role. The timing of when ING was looking for a junior engineer and when I was interested in the upstream space matched perfectly. AA: What inspired you to start a career in the oil and gas industry? How did you decide on becoming a petroleum engineer? KS: My interest in oil and gas was centered around a bank engineering role. I had graduated with a degree in chemical engineering, so I wasn’t fully informed on the upstream business. When I learned about bank engineering, though, my interest piqued. I found working with multiple management teams, learning their style of operations, and how it stacked up to others, to be very dynamic and insightful. One has the privilege of gaining insights on multiple basins and the ingenuity on how they’re being produced. In this role, and in many other engineering roles, there is a lot of autonomy, and I nd that to be very rewarding. AA: You often meet workers in industry who do not have a formal college degree but, in your case, how valuable was it to get the university experience? KS: I would say degree versus industry experience is 50:50. You denitely need the background on the science. That’s unavoidable. However, there are aspects of the job that just have to be learned through experience and mentorship.AA: How accepting do you think the oil and gas industry is for younger generations of workers? KS: I think it’s incredibly accepting. Especially since the age of digitization has come about, many young folks have learned that alongside their normal course work and can contribute to the new way of working. Additionally, I think the previous generation of oil and gas workforce recognizes the impending change of keys, as our generation steps in to lead.AA: How did you nd yourself transitioning from academia environment to the industry/corporate? What would you say to people who are about to make such transition? KS: I thought it was a stark contrast to work with people in many different stages of life versus just students who have not entered the work force yet. You gain a lot of insight to life, not just the industry, when interacting with coworkers, even ones who are only a year out of school. If I were speaking to folks who are making that transition, I would recommend that [to] 1) always ask questions 2) always show gratitude 3) keep a calendar 4) invest early on and 5) diversify your knowledge base.AA: Has the industry taken initiatives to smoothly transition young professionals into the oil sector? What, if anything, could be done better? KS: I would agree with that. I think through internships, co-ops, company-encouraged mentorship, and of course SPE, there are many opportunities available at the ngertips of the young oil and gas workforce. One thing that can be added on to the amazing things we currently do is to encourage petroleum engineers to expand their expertise. Instead of focusing on one discipline or just engineering, consider taking a night class in nance or cross pollinating even within petroleum engineering. If your expertise is production, try learning more about reserves or drilling. I think it’s important to make oneself versatile considering that the industry we’ve chosen is cyclical. Also be open to new opportunities. Some may seem Young Professionals in the Oil and Gas Industry: Interview with Kim Salinas, Bank Engineer, ING By Alan Alexeyev

Page 83

Oilman Magazine / September-October 2020 / OilmanMagazine.com81OILMAN COLUMNless attractive at the time but, in the end, you will have learned something you otherwise wouldn’t have been exposed to.AA: The oil and gas industry has tons of conferences and events. Have you attended any of them? If so, how useful do you nd them and what’s your takeaway? KS: Yes, I have attended many. I may be biased since I’m the 2020/2021 chair for the YP SPE group, but I think there is always value in attending the events whether from the content or the connections you make. AA: If you communicate with students on a regular basis, would you say there is an increased or decreased interest in starting a career in the oil and gas industry, in comparison to the past? KS: That depends on what you dene as “the past.” As I mentioned previously, oil and gas are cyclical. We have incredible peaks where people rush to the business and we also have troughs where people leave either permanently or temporarily. If you are referencing in the last ten years, I would say right now, students appear bearish on the industry and are considering other types of engineering at the moment. However, for the foreseeable future, we will need oil, and consequently we will need students to study petroleum engineering.AA: What advice do you provide to students who have an interest in the oil and gas industry? Should they pursue the career during these constant downturns? KS: I would say get a double major and be open to many industries upon graduating during a down market. If they keep their skills sharp, when the industry is on the upswing, many people will be calling them for employment. AA: What would you like to learn in the near future from experienced people who are in mid-to-late careers? KS: I would like to get a sense of the nature of the downturns they’ve seen and how they compare to the one we’re experiencing. I’d also like to understand what they did right and what they could have improved upon so that I may better prepare myself. SUBSCRIBE TODAY!Get the Oil & Gas news and data you need in a magazine you’ll be proud to read. To subscribe, complete a quick form online:OilmanMagazine.com/subscribe Editor@OilmanMagazine.com (800) 562-2340 Ex. 5

Page 84

Oilman Magazine / September-October 2020 / OilmanMagazine.com82OILMAN COLUMNImagine for a moment, you’re getting ready to dial into your weekly leader-ship call when you receive an urgent text from your director of operations. “Have you seen the latest National Hurricane Center advisory? There are two potential hurricanes heading our way this week. We need to talk ASAP!” This is an all too familiar scenario for many oil and gas executives with core infrastructure and operations in areas at risk for hurricanes (and one that is a reality for businesses with a pres-ence on the Gulf Coast as we write this). Under normal circumstances, you would gather your team and execute your Hurricane Response Plan – but these are not normal times.A Historically Active Hurricane Season Amid an Ongoing Global PandemicThis year’s hurricane season is one for the record books and is expected to get worse. As of early August, the updated National Oceanic and Atmospheric Administration seasonal forecast is calling for 19-25 named storms, 7-11 hurricanes, and 4-6 major hurricanes (Category 3 and above). Current projections show a nearly 80 percent chance that at least one major hurricane will strike the U.S. coast. Meanwhile, COVID-19 has created a growing number of nancial and operational impacts on the oil and gas industry. The rapid shift to remote work combined with reduced travel resulted in a plummeting demand for oil. The reduced demand was exacerbated by a delay in production agreements between OPEC and Russia; contributing to the price of oil dropping more than 50 percent from January to March. According to a report from the International Energy Agency (IEA), global oil demand will likely see its rst annual drop since 2009, worsening the widespread effects on oil companies including increasing bankruptcies, layoffs, and a constrained scal environment. Baker Hughes’ recent report identied 298 rigs in operation in North America, a 73 percent decrease since February. Operationally, businesses have faced challenges as well, ranging from outbreaks of the virus on rigs and productions facilities where there are limited means of working remotely, to the need to reduce stafng levels and quickly implement health and safety protocols. This year has been difcult for the oil and gas industry, and with peak hurricane season upon us, it is likely to get worse.How Will COVID-19 Impact Hurricane Preparedness and Response?While the Federal Government started this hurricane season with a record setting $80 billion in the Disaster Relief Fund, there are challenges posed by COVID-19 that will not be solved through funding alone. Having exhausted much of their resources responding to COVID-19, the nation’s emergency management systems have quickly adapted response strategies which remain largely untested. Plans call for limited eld deployments of additional personnel in response to hurricanes, relying upon remote consultations or those already residing in or previously deployed to the impacted areas. Critical activities such as evacuations, sheltering and damage assessments have been redesigned to accommodate fewer available resources and mitigate the spread of COVID-19 while still meeting the needs of their communities. While some of these changes may not directly impact an oil The Challenge of Hurricane Preparedness During a Global Pandemic By Jim MacDonnell, Matt Grossman and Clark SackschewskyPhoto courtesy of BDO

Page 85

Oilman Magazine / September-October 2020 / OilmanMagazine.com83OILMAN COLUMNor gas business, they will affect your people and operating environment. The bottom line is that any response to a hurricane under these conditions will likely mean longer wait times for assistance and ultimately greater disruptions to business.Preparing for a Hurricane During an Ongoing PandemicWhile the challenges posed by hur-ricanes during the ongoing pandemic are real and may even seem daunting, there are four focus areas that can help to better prepare your business and people. Review, Rene and Exercise Your PlansCOVID-19 has radically changed the way businesses are working, and therefore, existing response plans may not be effective in this environ-ment. Take the time to review and rene your plans to ensure they truly reect your capabilities under the current operating environment. Here is a list of considerations: • Changes to key business processes (specically those impacted by remote work and social distancing requirements).• New workarounds that have been implemented.• Conrm communication methods and technologies.• Changes to team member roles and responsibilities.• Current location and status of employees and other key stake-holders.• Status and current capacity of business partners.• Adherence to safety and health protocols (including PPE requirements).Align with External StakeholdersWith the ongoing changes to your operations and response and recov-ery processes, it is more important than ever to align with external stakeholders. Key stakeholders may include governmental entities, key vendors or service providers, busi-ness partners, or anyone else you may rely upon to respond to or recover from a hurricane. Critical issues to discuss include current response capabilities, health and safety protocols (e.g., PPE or social distancing), travel and access proce-dures, virtual coordination processes, and communication methods. Focus on Your PeopleTaking care of your people should always be a priority, but it is even more important now as research shows that during a protracted disas-ter, employees who feel supported are more likely to stay with the busi-ness, are more productive, and are better problem-solvers. However, it is not easy to be supportive and show empathy in a virtual environ-ment. Communicate with your em-ployees about how you are prepar-ing, what their role will be, what they can expect from you, and where they should go for more information or assistance. Identify Hidden OpportunitiesIn the chaos of crisis, opportunities often present themselves. We need to actively look for them. Some oil and gas companies have already used COVID-19 as a catalyst for long-term growth, identifying new oppor-tunities such as nding operational efciencies, making investments in renewable energy, and shifting production capabilities to higher demand consumer products. Managing your business’ preparation and response to a hurricane during an ongoing pandemic is no simple task. There is much to consider and do but taking these steps can help you prepare for the impacts, bolster overall resilience in the face of a dynamic operating environment, and ultimately nd the hidden opportunities in order to emerge stronger.Jim MacDonnell is a direc-tor with BDO’s Crisis Management and Business Continuity Practice. He has over 18 years’ experi-ence supporting Fortune 100 clients and federal agencies prepare for and respond to crises and emerging risks. MacDon-nell has an MBA from the University on North Carolina, an MS in criminal justice and homeland security from St. Joseph’s University. He is also a Certied Busi-ness Continuity Professional (CBCP) and serves on the Board of Directors for the Washington D.C. chapter of the Associa-tion of Continuity Professionals (ACP). Matt Grossman is a Senior Manager in BDO’s Crisis Management and Business Continuity practice where he helps organizations better understand their risks, prepare for operational disruptions and crises, and ultimately bring order to chaos. He brings more than 14 years of experience in developing, implementing, assessing, and improving risk- and resilience-related programs for Fortune 100, mid-sized businesses, and public sector organiza-tions. As a passionate advocate for resil-ience (both personal and organizational), Grossman is driven by the unique chal-lenges of creating cultures of prepared-ness and resilient organizations. Clark Sackschewsky is a Tax Managing Principal and the National Natural Resources Practice Leader at BDO. Sackschewsky has more than 20 years of corporate tax experience in both public accounting and industry. Sackschewsky has extensive experience with Upstream and Downstream oil and gas, oileld service, technology, and nancial services industry and has served as a regional expert for tax in SOX 4040. He has worked on hundreds of oil and gas transactions and served as lead on over 50 different oil and gas clients. His signicant experience includes ASC 740, tax planning implementation for US federal, state and cross border transactions, transfer pricing, and internal reorganizations.

Page 86

Oilman Magazine / September-October 2020 / OilmanMagazine.com84OILMAN COLUMNOILMAN COLUMNAs software and technology continue to further penetrate the oil and gas industry, the upstream sector is seeing the technology benet as well, in the form of programs that can digitally reproduce the inner workings of a production plant – a so-called digital twin, which is essentially all of the metrics of that production plant at your ngertips. The technology creates a virtual model of production assets which are continuously updated, by a network of sensors streaming data on operational conditions into the system. Digital twins can increase operational efciency by up to 10 percent. OILMAN Magazine had the oppor-tunity to speak with KBC about its digital twin technology. KBC is a lead-ing Digital Transformation company, which offers a unique blend of digital oileld solutions and technologies with the asset digital twin, differentiated management and technical consulting, extended through real-time data and the process automation domain.35 Years in the MakingTaking an entire plant and its internal operations and digitalizing it is a tall or-der. KBC described the lengthy process of how this software came to be. The whole suite of technologies (Multiash for thermodynamics and reservoir uid characterization, Maximus for thermal hydraulics and Petro-SIM for topsides and other process equipment simulations and overall integration) has been con-tinuously developed over the past 35 years, with some of the original developers still very much engaged in taking the systems forward through our on-going research and develop-ment program. There has been much collaboration through the years with academia and joint industry projects across the globe. This software has been in the mak-ing for a very long time and has been ever-changing to meet the demands of the industry. Software like this offers upstream companies and op-erators a way to better their craft at ex-traction, processing and all the logistics that are part of the upstream sector. End-to-End SolutionsFrom project start to nish, you will always be better off with technology that spans the entire project. KBC asserts that, “As the model evolves, gaining more detail and use cases that spawn sub-models, [it] reect[s] different purposes still using the single version of the truth.” Anyone in software development knows that the single source of truth is very important; otherwise, you can end up with a project failing or being signicantly delayed because of misinformation. KBC went on to say, “Key use cases go beyond the traditional steady state conceptual and detailed design into dynamic modeling for control systems analysis and checkout. As the development moves through construction to production, the system allows operations staff to train on operating the asset and to get familiar with different operations scenarios.”In this case, the technology also helps the users and operators prepare to utilize the actual systems once they go live. Besides using this for plants and internal operations, what other applications does this software have in the upstream sector? There are many facets to the upstream sector that could benet from technology such as this. KBC responded, “We see that the asset digital twin is a single integrated production model, operationalized with real-time production data connecting wells, chokes, owlines and a wide range of processing and power generation equipment with common thermodynamics and uid characterization throughout for consistent results.” At this level, users Digital Twins Flourish in Upstream Sector By Eric R. EisslerPhoto courtesy of Elnur Amikishiyev – www.123RF.com

Page 87

Oilman Magazine / September-October 2020 / OilmanMagazine.com85OILMAN COLUMNOILMAN COLUMNcan get down to the very start of extraction and maximize results with valuable data and metrics from early on in the process. The technology behind digital twins allows companies to have many ad-vantages that would otherwise not be possible, such as the ability to run risk analyses, health assessments, and what-if scenarios in real-time; train personnel in a 3D immersive, risk-free environ-ment; and the capability to detect problems early on before dangerous levels are reached. Digital twins can constantly be updated, modied and tted to meet the needs of the user. By going about it in this way, compa-nies are able to either integrate current sensors and corresponding data or add new ones. The beauty of it is that you don’t have to start from scratch, you can use your already existing data monitoring systems to integrate into a digital twin system. This approach adds to cost savings. Fight Corrosion with Digital TwinsIn addition to using digital twins for production of assets, they can be employed to help in the ght against corrosion. One of the leading causes of downtime in the oil and gas indus-try is when corrosion is not monitored and leads to a shutdown of the assets. KBC uses OLI’s electrolyte chemistry and thermodynamics modeling as part of the digital twin, which allows us to predict concentrations of the key cor-rosion-accelerating species through the process equipment. These predictive analytics are then used to inform pro-jections of corrosion rates. Engineers can examine alternate scenarios (impact of operating conditions, inhibitors and so on) to understand how to reduce concentrations and slow down the cor-rosion rate. This helps save money over time because corrosion is constantly being monitored and mitigated, thus preventing downtime. Oil and Gas 4.0With the quick uptake of digital twins in the upstream sector and the weathering of COVID-19 after the 2014-2015 downturn, it is easy to see that the industry has been tried and battered, only to emerge stronger than before by embracing new technologies to increase efciency and shore up the bottom line. Over the past ten years or so, there has nally been that drive toward embracing technology and looking toward what is next. The old ways of working, where the only thing that mattered was getting the oil out, have been replaced by technology with a smarter approach to extraction and reduced waste. Before, pumps would be run until they broke and a new pump would be on standby to replace the failed one. Now predictive analytics and big data and sensors can pinpoint when a part of a pump is going to go down and, instead of replacing the entire pump, the part can quickly be switched out, leading to less downtime and capital spending. The oil and gas industry has had to reinvent itself several times over the past decade and now appears to be in a place where it can play by the rules of the 21st century and be more cost effective and even more environmentally friendly in some ways, something that was not thinkable over ten years ago. ADVERTISE WITH US!Are you looking to expand your reach in the oil and gas marketplace? Do you have a product or service that would beneﬁt the industry? If so, we would like to speak with you! We have a creative team that can design your ad! Call us (800) 562-2340 Ex. 1 OilmanMagazine.com/advertise Advertising@OilmanMagazine.com

Page 88

Oilman Magazine / September-October 2020 / OilmanMagazine.com86OILMAN COLUMNThe COVID-19 pandemic has put many oil and gas companies in nancially dif-cult positions. In response to low oil prices and a decline in earnings, oil and gas companies should understand sev-eral tax provisions that could help them increase liquidity by producing a tax refund, reducing tax liability or deferring certain tax payments. This includes new tax changes in the CARES Act as well as several established tax provisions that companies can often overlook.DeductionsSeveral tax provisions can help oil and gas companies offset prior tax periods and increase deductions.NOL Carryback: The CARES Act includes a number of tax changes that can help oil and gas companies reduce their tax liability and possibly generate a tax refund. A key provision is the reinstatement of the net operating loss (NOL) carryback under IRC Section 172(a). Companies can now carry back NOLs incurred in 2018, 2019 and 2020 for up to ve years and offset up to 100 percent of taxable income for the years to which the carryback is applied. Business interest deduction: The CARES Act increased the adjusted taxable income portion of the business interest deduction limitation under IRC Section 163(j) from 30 to 50 percent for taxable years 2019 and 2020; this is limited to 2020 for partnerships. The Act also allows businesses to use their taxable income from 2019 (rather than 2020) in tax year 2020 for purposes of applying the 50 percent limitation. The increased limits for the business interest deduction is especially helpful for oil and gas companies with extensive debt nancing.Bonus depreciation: The Tax Cuts and Jobs Act (TCJA) increased the bonus deprecation to 100 percent for qualied property acquired and placed in service after September 27, 2017, and before January 1, 2023. Oil and gas producers should consider whether using their bonus depreciation deduction can help them produce or increase an NOL carryback. This requires them to weigh the benet of creating a current year NOL through bonus depreciation or choosing to elect out of the bonus. Companies should also include future year forecasting to determine the effect of future depreciations.Oil and gas companies often take bonus depreciation when they can create an NOL carryback that produces a tax refund or when partnership investors depend on ow-through losses to offset other income. Companies often elect out of bonus depreciation when they do not have prior year income to offset with an NOL carryback or if the losses would shift investors to a lower tax rate.Expired or abandoned leases: Oil and gas companies can nd additional tax reductions by deducting as an ordinary loss the adjusted tax basis of expired leases or the costs of abandoning a lease. Companies should review their oil and gas leases to determine which leases have expired or been abandoned during the tax year. This requires an examination of the facts and circumstances around leases that have a prolonged period of inactivity or for which the company does not have plans to develop or hold for economic gain.Capitalize intangible drilling costs: Oil and gas companies have the option to either deduct or capitalize intangible drilling costs (IDCs), which include labor costs, ground preparation and similar costs in the preparation of a well. Typically, most companies deduct IDCs. However, in an environment of low prices and low protability, oil and gas companies should consider the tax effect of capitalizing IDCs in order to maximize the tax rate benet over the 60-month amortization period. This option applies to domestic wells only, as foreign IDCs must be capitalized.Companies should consider capitaliza-tion if the IDC deduction would create an NOL without a carryback benet or put the taxpayer in a lower tax rate bracket. Investors should also consider capitalization if the IDC deduction would put them in a position where there is an Alternative Minimum Tax (AMT) Excess IDC Preference that is Tax Considerations for Oil and Gas in a Low Price Environment By Rob MyattPhoto courtesy of Weaver

Page 89

Oilman Magazine / September-October 2020 / OilmanMagazine.com87OILMAN COLUMNnot deductible for AMT purposes. This is common in tax years with high IDCs or low taxable income.Taxpayers that received income through a ow-through entity can also elect to capitalize. As part of their decision making process, they should analyze the prior tax years for NOL carryback potential, the current tax year for the tax rate bracket and excess IDC position, and future tax years to assess the future benet of IDC amortization.Tax CreditsOil and gas companies also should exam-ine several key tax credits that can help them reduce their tax liability and boost liquidity.Alternative Minimum Tax (AMT) credit refunds: The TCJA repealed the corporate AMT for taxable years after 2017, but allowed corporations to recover AMT credits after 2017 and before 2022 with credits fully refundable in 2021. The CARES Act allows corporations to accelerate to 2019 claims for fully refundable corporate AMT credits with the option to claim the credits in 2018. Marginal well production credit: Natural gas producers can receive tax credits under IRC Section 45I for pro-duction from marginal wells, which are low producing wells as dened under IRC Section 613A(c)(6). An owner of a marginal well may claim the credit any time within three years of the due date (excluding extensions) of its original or amended return. Taxpayers can le an amended return, if they led a return, but did not claim the credit or claimed the credit in an amount other than the IRS applicable credit amount for the tax year. They also can carry back unused credits to each of the preceding ve tax years and then carry the remaining credit forward to each of the 20 tax years after the year of the credit. The credit for crude oil was phased out for tax years beginning in 2018, but natural gas producers should review their properties to identify which wells are eligible for the tax credit and whether they have claimed the credit for eligible marginal wells on past returns. They also should analyze their wells in order to accurately calculate the allowable tax credits.Refunds and Payment ExtensionsOil and gas companies in need of im-mediate relief should consider taking advantage of established tax provisions that allow for certain refunds and pay-ment extensions.Quick refund of estimated tax overpayment: Companies can im-prove short-term liquidity by applying for a quick refund, if the estimated tax overpayment is at least 10 percent of the expected tax liability, and that amount is at least $500. Companies in this position must le Form 4466, Application for Quick Refund of Overpayment of Es-timated Taxes, after the end of their tax year and before their ling date, and the IRS generally acts on the request within 45 days of ling. 2019 tax payment extension: Compa-nies that owe taxes for 2019, but expect an NOL in 2020 that can be carried back to offset the 2019 tax, can defer the 2019 tax payment by ling Form 1138, Extension of Time for Payment of Taxes by a Corporation Expecting a Net Operating Loss Carryback. The postponed payment cannot exceed the expected overpayment from the NOL carryback, and only tax payments that are due after Form 1138 is led are eli-gible for an extension. Companies must le Form 1138 after the start of the tax year of the expected NOL but before the payment deadline for the tax of the preceding tax year. The IRS must exam-ine the request within 90 days of ling.Payroll Tax ProvisionsIn addition to provisions that can help oil and gas companies increase deductions, the CARES Act includes an employee retention credit and a deferral for payroll tax payments that could help them retain employees during the downturn.Employee retention credit: The Employee Retention Credit (ERC) is a fully refundable tax credit equal to 50 percent of “qualied wages” paid by an “eligible employer” to employees after March 12, 2020, and before January 1, 2021. The credit is available to employers whose operations have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings, or who have experienced a greater than 50 percent reduction in quarterly receipts, measured on a year-over-year basis. The maximum amount of qualied wages, which can include certain health plan expenses, is $10,000 per employee.The tax benet differs according to the size of the company. For employers that had an average number of full-time employees (within the meaning of IRC Section 480H) of 100 or fewer in 2019, wages paid to any employee can qualify. However, for employers that had an average number of full-time employees greater than 100 in 2019, only wages paid to those employees that are not providing services may qualify.Payroll tax payment deferral: Employers can also defer over two years the payment of the employer’s portion of the Social Security payroll tax due on employee wages paid between the March 27, 2020, and December 31, 2020. Taxpayers must pay half of the total amount by December 31, 2021, and the other half by December 31, 2022.Rob Myatt, CPA is the partner-in-charge, Energy Services, for Weaver, the largest independent accounting rm in the southwest. He is an active member of the Texas Society of Certied Public Accountants and the American Institute of Certied Public Accountants. He is also an active member of the Council of Petroleum Accountants Society (COPAS) and the Young Professionals in Energy of Dallas. Myatt holds a master of science in tax accounting and a bachelor of business administration in accounting, both from Texas Tech University. He can be reached at rob.myatt@weaver.com.

Page 90

Oilman Magazine / September-October 2020 / OilmanMagazine.com88OILMAN COLUMNProtecting your greatest assets – the people that make up your operation and the operation itself – are at the forefront of any company’s mind in the oil and gas industry. While much of a renery’s commencement takes place in an ofce with very little immediate risk; once in operation, that becomes a different story. Reneries are a risky business. Oil, gas, chemicals, etc. have to be precise when dealing with combustible gasses. Traditional lower explosive limit (LEL) sensors fall short because they are only calibrated to detect one gas. If there were only one threat, it would make things much simpler, but unfortunately that is not the case. There are many gas mixtures present and their detection is critical to safety and, in turn, a successful operation. Awareness is key and knowledge is power when running something of this capacity. Line of DefenseTo rectify this problem, Blackline Safety and NevadaNano have come together to drive combustible gas detection into the future with the Molecular Property Spectrometer (MPS) sensor. Blackline Safety is a globally connected safety leader that provides wearable safety technology, personal and area gas monitoring, cloud-connected software and data analytics to meet demanding safety challenges and increase productivity of organizations in more than 100 countries. Its wearables provide a lifeline to tens of thousands of men and women, having reported over 100 billion data-points and initiated over ve million emergency responses. NevadaNano is the developer of the MPS gas-sensing products that use lab-on-a-chip chemical analysis structures to detect, identify and quantify chemicals in the air. These sensors provide information about the air to ensure safer working and living environments. Transforming the way businesses monitor environments for unsafe levels of combustible gas, NevadaNano has capitalized on the latest advancements in MEMS technology and come up with the most signicant innovation in over 40 years. Compared to traditional catalytic bead and non-dispersive infrared sensors, the MPS sensor provides users with unparalleled LEL measurement accuracy for a TrueLEL™ combustible gas reading in any environment. It is poison immune, meaning users can remove guess work from gas detection and are condent that workers are protected. The MPS sensor seamlessly integrates into companies’ current safety program, eliminating the need to re-train users currently familiar with traditional LEL gas sensors. The MPS sensor is part of a standard four-gas conguration for the G7 wearable device with purchase and leasing options, both of which include the following: • G7 device • Cartridge with four-gas diffusion sensors including MPS • System access including cellular connectivity • Built-in location technology • Cloud software• Data storage • Supervisor alerting via SOS latch Blackline also offers a data analytics software called Blackline Analytics Wearable Safety Technology in Combustible Gas Detection By Sarah SkinnerPhoto courtesy of Kiattisak Chiphimai – www.123RF.com

Page 91

Oilman Magazine / September-October 2020 / OilmanMagazine.com89OILMAN COLUMNthat enables businesses to leverage the data streamed from their connected G7 directly to the Cloud and transforms it into easy-to-understand maps, graphs and tables. This can be used to view what is most important to a business, including asset maintenance, usage, compliance status, alert, location history and more. A new Blackline Analytics MPS report is available to support an exclusive MPS sensor gas classication system that places identied gases into six different categories, including hydrogen. All gas readings and alerts are geo-tagged for visual and interactive reporting to identify if and where hazardous gas leaks may be taking place. Blackline also offers the following value-added services that can incorporate into G7:• Emergency response management and 24/7 live monitoring• Two-way voice calling• Push-to-talk that adds walkie-talkie functionality with 100 channels of communicationBattery Capacity and DurabilityThe battery life of G7 with the MPS sensor is 18 hours of continuous operation and full cloud connectivity. Blackline’s new G7 powerpack, an external rechargeable battery accessory that clips to the back of any G7, extends battery life even further to a total of 36 hours. The extended battery life is useful in events such as shutdowns or turnarounds where gas detection is needed around the clock. The MPS sensor uses robust micro-electro-mechanical systems (MEMS) technology, making it incredibly durable. The sensor leverages silicon in its design and is extremely low in mass. A built-in microprocessor uses signal processing to manage the MEMS and combine this information with currant environmental conditions from temperature, humidity and pressure sensors continuously. This means that the MPS sensor is not impacted by temperature, can operate in nearly all conditions, and provides a very stable output. The MPS sensor features internal self-diagnostics and fail-safe design. If the MPS sensor fails for any reason, it will provide an error message through G7. However, while the sensor is factory calibrated, Blackline recommends performing a daily bump test of G7 to ensure that all sensors are operational, including MPS. Blackline recommends calibrating every six months to ensure your sensors are re-adjusted to read as accurately as possible. The CloudNot everyone has migrated to the Cloud, but those that have are at an advantage. Offering efciency, control, recovery, mobility and security, operating in the Cloud gives you a competitive edge. All G7 wearables include cloud connectivity at no additional cost. Every device, including those equipped with the MPS sensor, feature built-in cellular connectivity that enables automatic connection to the Blackline Safety Cloud right out of the box. All data is streamed to the Cloud automatically and seamlessly from the wearable device without burden or cost to the user. Data is accessible to users with a Blackline Analytics log-in from any Internet-connected device. Pick Your MottoUsually the motto is “Safety First;” now, it seems as though it has transitioned to “Stay Safe.” Whatever phrase works for a company, the fundamental message is clear: safety is an absolute priority when dealing with combustible gasses. When the evolution of protection reaches a point where it can detect gas mixtures as accurately as it does a single gas, eliminating false alarms with built-in environmental compensation, poison immunity, fail-safe design and a real-time conversion factor, you’ve got quite a machine. ADVERTISE WITH US!Are you looking to expand your reach in the oil and gas marketplace? Do you have a product or service that would beneﬁt the industry? If so, we would like to speak with you! We have a creative team that can design your ad! Call us (800) 562-2340 Ex. 1 OilmanMagazine.com/advertise Advertising@OilmanMagazine.com

Page 92

Oilman Magazine / September-October 2020 / OilmanMagazine.com90OILMAN COLUMNSeveral inuences play integral roles in the evolution of the midstream sector, with compliance and safety often at the heart of the industry’s pursuit of operational excellence. Recent regula-tion changes are among the most cur-rent stimuli in midstream operations, which have led to several operator trends in recent months. The impact of such modications has already been felt throughout the industry, leading operators to seek the comprehensive solution of third-party compliance management and its many benets. Compliance Trends in Midstream OperationsDocumentation is key to compliance, which is why operators must ensure records are complete and accessible – fragmented documentation can lead to incidents, violations and nes. Such signicance has led to a trend in the midstream sector of compliance documentation assessment. The Pipe-line and Hazardous Materials Safety Administration (PHMSA) discusses records as needing to be traceable, veri-able and complete (TVC), meaning documentation can be traced to origi-nal records, veriable via “complemen-tary but separate documentation,” and complete with all required information. Records maintenance is an ongoing process, but operators are initiating the assessment process to establish a compliance baseline. Maximum allowable operating pres-sure (MAOP) is a must-have feature of pipeline operations, but not all assets possess adequate documentation to substantiate their MAOP. Previ-ously, certain pipelines constructed before 1970 were exempt from spe-cic MAOP testing requirements; the exemption, however, is no longer ap-plicable, leading to a trend of MAOP reconrmation for relevant pipelines. Relating directly to TVC recordkeep-ing, proper MAOP compliance de-mands adequate documentation, which some post-1970 pipes lack. Pipelines that cannot support MAOP determi-nation within Class 3 and 4 locations and high consequence areas with TVC records must work toward reconr-mation of MAOP and establish more reliable documentation.Assessment of consequence areas is a necessity in determining operational, maintenance and emergency proce-dures, which is why integrity assess-ments of certain pipelines outside of HCAs have come into focus. This trend is relevant to the newly dened moderate consequence areas (MCAs), which have less potential impact to in-frastructure and the public, but justify the need for proper safety assessment.Impact on OperatorsOperators will discover several impacts on their operational processes result-ing from these trends. Assessing and lling gaps in recordkeeping, especially for more senior pipelines, will absorb noticeable overhead and personnel as records are reviewed and processed. This will grow dedicated time in com-bination with MAOP reconrmation for relevant pipelines, especially for larger companies with extensive mile-age. Similarly, threat identication and integrity assessments are likely to create a workload that internal departments will nd difcult to complete with new considerations and processes.Operators must not only plan for changes, but understand how relevant processes should be implemented Third-Party Compliance Management Trends in Midstream Operations By Louis Krannich and Whitney VandiverPhoto courtesy of Canva

Page 93

Oilman Magazine / September-October 2020 / OilmanMagazine.com91OILMAN COLUMNto support current operations while monitoring forward movement toward compliance. However, developing and implementing new procedures and processes will be the greatest hurdle operators face during this time. Some requirements are new to operators’ ra-dars while coming with vague descrip-tions beyond agencies’ objectives for operator safety, leaving operators to de-termine how to assess records for TVC principles, determine which pipelines qualify for MAOP reconrmation, and evaluate which areas qualify as MCAs.PHMSA has granted operators a time-line that focuses on development with additional time for implementation. However, even with years of available time, it is imperative for operators to prudently plan how to avoid pitfalls that can lead to compliance violations. With process development and docu-mentation as the earliest deadlines, operators should know how they will meet the requirements. Developing the roadmap to achieving the objectives – time-consuming and costly if not done correctly –is the next step.In preparation for implementation deadlines, operators must devote time to executing new procedures, budget for support, and dedicate resources for compliance review. One can estimate that, on average, operators will commit upwards of two months of full-time hours to each asset’s records review. Moreover, MAOP reconrmation can take as long as two to ten years of consistent testing, depending on asset size, for larger operators, which will be incremental to existing integrity workload. Furthermore, for evaluation to determine Class 3 and 4 locations and MCAs, operators should anticipate dedicating three to ve months per asset, depending on size, for proper analysis. Such progress will take no-ticeable time to implement; combined efforts, however, are likely to take years for many operators to establish pro-cedures and complete requirements in addition to existing workload. This has sparked a growing concern within the industry regarding how operators are to know when they’ve successfully ful-lled their responsibilities or, perhaps more signicantly, when they’ve missed the mark altogether.Third-Party Compliance Manage-ment BenetsA slew of factors goes into manag-ing changes in pipeline processes, and many operators will nd the tasks over-whelming amid the regular demands of daily operations. By understanding how such requirements can impact operators, another trend in oil and gas operations that has gained signicant ground in the last ve years is third-party support via contracted services. This trend, however, is saving opera-tors time and resources.Third-party management companies that specialize in oil and gas operations, inspections, testing and compliance of-fer a host of benets in areas of pipe-line operation. Such services provide operators with experienced personnel that is familiar with the vast array of processes involved in instituting and managing operational changes. Com-bined with a breadth of specializations, this depth of experience can offer a premier level of expertise in operation-al technicalities, from technology to regulations. The most signicant draw for many operators is the cost savings that can be achieved by the nature of third-party management. Operators often nd that they can experience a substantial reduction in daily and an-nual operational costs via third-party management, and addressing compli-ance issues such as those discussed here is no different.A common struggle for operators is determining which regulations apply to which pipelines, a temperamental pain point. However, third-party compli-ance management assists operators in jurisdictional analysis to ensure that each asset is appropriately managed and documented to avoid violations brought on by misunderstandings or oversight. Such analysis can assist operators in anticipating potential is-sues with assessment and management cycles as they relate to compliance-driven schedules.Third-party compliance management also supports operators with records review and assessment. In addition to documentation being traceable, veri-able and complete, documentation must be properly retained and acces-sible. Given that many pipelines have been in operation for decades, opera-tors must be aware of what documen-tation they have, where it is located, and what it does not accomplish. Third-party compliance management lets operators focus on operations while managing the headache of physi-cal and digital documentation.In a similar thread, operators often stumble with documentation during audits. While agencies tend to pro-vide advanced notice, operators often need additional support to ensure that applicable records are readily avail-able, manuals always remain current, and compliance gaps are continually addressed. Third-party compliance management, however, looks ahead to assess records in advance of audits and help operators develop a founda-tion on which to base their compliance. In this way, third-party compliance management can make the difference between operators being caught in the headlights of unexpected questions and operators presenting agencies with well-prepared documentation.Third-party compliance manage-ment also takes into consideration the operators’ budgets. Compliance is no small matter for pipeline operations, and operators must stay in compliance while ensuring the protability of their organizations. This is true in every scenario, whether it is a small company looking to maintain existing assets or a large corporation with acquisi-tions on the horizon. Consequently, third-party compliance management providers work to achieve compliance in a manageable way that assists with Continued on next page...

Page 94

Oilman Magazine / September-October 2020 / OilmanMagazine.com92budget forecasting. With economies of scale and direct cost reduction, such providers are often able to offer operators comprehensive solutions at a much lower cost than internal methods.Lastly, operators often seek third-party vendors to train their internal personnel on compliance. From control room management to eld safety, the need for training and education is a constant requirement with a uid compass. As standards, best practices and regulations evolve, so must training objectives. Third-party compliance management addresses these scenarios with on-the-mark methods that help secure operators’ understanding of their responsibilities at every level of operation. From individual qualication to team training, third-party compliance management designs training sets and instructs personnel on the most efcient and safest ways to achieve company goals. This mindset of focusing on overall performance at every stage of operations benets operators no matter how they utilize such a service, internally for their own staff or with contracting personnel that has already been through extensive training.Trends in midstream operations are often led by outside inuences on the oil and gas market, and compli-ance aspects are no exception. Con-sequently, operators must work to modify their existing processes while simultaneously developing new ones to accommodate regulating agencies’ objectives. This can be a monumental task for some operators; however, as the industry has shown its propensity for innovation, operators can now nd expert support via third-party compliance management. By leverag-ing unparalleled operational experi-ence with compliance expertise, such services can save operators time, money and, perhaps most important-ly, a record of compliance violations they never saw coming.Louis Krannich, is VP Compli-ance and Technical Operations, LineStar Integrity Services, a fully integrated suite of pipeline com-pliance, technology and integrity maintenance, and Whitney Van-diver, is a compliance special-ist, NuGen Automation, LLC, a premier SCADA integration and IT/Network management company that also operates the nation’s larg-est third-party control center. OILMAN COLUMN

Page 95

Oilman Magazine / September-October 2020 / OilmanMagazine.com93Driven by the worldwide COVID pan-demic, the oil and gas industry is chal-lenged to plan and operate with new procedures and approaches to keep its employees healthy. Social distanc-ing, sick employees, and quarantine requirements can lead to smaller crew sizes, staggered shifts, and limited ex-pert availability. Companies are often under pressure to operate safely with fewer and less experienced employees. This pressure is compounded by the retirement of large percentages of experienced workers in many indus-tries. Industrial organizations have indicated that up to 25-30 percent of their workforces are retiring over the next three to ve years. In an industry like oil and gas, where the workforce is regularly being replaced as work-ers age out, there are real questions as to how to make existing employees more productive and efcient, how to on-board new employees quickly, and how to enable less experienced em-ployees to leverage expert knowledge in order to be procient and operate safely – and how to do all this when travel and in-person collaboration may be hampered.This is where augmented reality (AR) can help. An industrial AR solution can capture skills and expertise, apply them to training and work instruction content, and ultimately drive knowledge transfer across an enterprise to increase collaboration and productivity while decreasing errors. It can be a fundamental tool to help drive business continuity, exibility and resilience.An AR solution can help upstream frontline workers repair an oil well, or midstream workers monitor and man-age segments of a remote pipeline, or a downstream renery technician react to real-time sensor data from a supervisory control and data acquisi-tion (SCADA) system to implement corrective actions faster. Step-by-step, guided work instructions can be created with AR to make it easy for frontline workers to complete the task at hand by simply donning a headset with step-by-step instructions and real-time data appearing within their eld of vision. Instructions are enhanced with photos, videos, 3D dia-grams, sensor data as well as sequen-tial instructions requiring evidence of successful completion before prompt-ing workers to move to the next step. It combines to create an interactive, multimedia experience that is far supe-rior to past approaches with paper or rudimentary digitization.Onboarding and TrainingNew employees rely on more experi-enced employees to show them how a job gets done. Before AR, both parties needed to be onsite for training, espe-cially when the task at hand involves machinery or tools new to the trainee. Now, with AR solutions, the trainee and trainer don’t need to be on site together for instruction to take place; in some case, trainers may not be required at all. Evidence of success-ful task completion can be captured via photos or videos so that auditing and evaluating can be automated or performed remotely.Experts can create digital tutorials based on their knowledge and overlay the tutorial on real-world equipment. No matter how much equipment or how many procedures a technician on an oil rig needs to learn or how many tutorials an engineer needs to map out, it can be done easily and quickly with an industrial AR solution. Such solutions deliver digital transformation and productivity to frontline workers in a simple, consistent and scalable way.Workow Instructional ContentWithout additional consulting or pro-gramming, experts create step-by-step digital instructions overlaying the rig’s AR is Driving Business Continuity, Flexibility and Resilience in the Oil and Gas Industry By Kelly MaloneOILMAN COLUMNContinued on next page...

Page 96

Oilman Magazine / September-October 2020 / OilmanMagazine.com94OILMAN COLUMNequipment, which other workers see via an AR device such as a heads-up display (HoloLens and Magic Leap are two popular examples) or an AR-enabled tablet like an iPad. Instructions appear as a checklist where steps are spatially anchored to the equipment and workers mark off each step when completed.Any supporting materials a worker may need in addition to the basic step-by-step instructions and checklist, such as supplemental photographs, videos, PDFs or documents, further aid the worker in knowing exactly how to operate, maintain or repair equipment. An operator can walk up to the same equipment type at any location, put on a headset, and follow the step-by-step instructions to get the job done. Independent studies comparing AR content with traditional approaches have demonstrated 36 to100 percent decrease in errors when using AR. The technology helps less experienced workers make fewer mistakes and become procient much faster, and experienced workers will be more consistent when completing complex or less frequently executed tasks.Safely OperatingSpecic safety training is a vital component when it comes to keeping equipment properly maintained, using machinery appropriately, and keeping frontline workers and their colleagues safe. Upon completing a high incident safety issue analysis, a steel plant found 85 percent of incidents occurred with workers who had been on the job for 30 days or less. This emphasizes the value of efcient training solutions like those built around AR to guide new employees through tasks and safety protocols from the get-go to reduce the margin of error and number of incidents. AR content is a great medium to docu-ment the practices and procedures for a lockout/tagout process. A step-by-step checklist can be accessed hands-free from a headset while a worker is per-forming the procedure. Evidence for each step completion can be required and captured before a worker is prompt-ed to move to the next step. This can even benet experienced technicians who may get distracted by other activi-ties within their environment.An AR solution can also help frontline workers operate complex machinery more safely by incorporating real-time data from SCADA systems into their heads-up displays. Real-time warnings or updated readings can be viewed with a headset when a worker is at the machine. There is no need to radio the control room and a worker’s hands are free to manipulate the equipment or take corrective action. This can result in a faster or more accurate and safer response or action. It can also help workers operate more safely when completing tasks in harsh or remote en-vironments such an oil rig in the North Sea or a pipeline in Alberta.Expert AssistanceLeveraging experts in real-time is another area where AR solutions really shine, especially when work is being performed in remote locations as de-scribed above. Frontline workers with questions about any task (whether it be a new or unfamiliar process) can initi-Taqtile’s Manifest platform allows skilled workers to create stored, step-by-step procedures with minimal training. Markers and position indicators steer users to key components and equipment locations. Authors can include video, audio, photos, documents or schematics.On Taqtile’s Manifest platform, procedures are visually overlaid step-by-step on real equipment. Operators can document work performed using pictures, video and text.

Page 97

Oilman Magazine / September-October 2020 / OilmanMagazine.com95OILMAN COLUMNate a real-time chat with an expert from their heads-up display. Communication can be initiated directly from the step they need help with, providing valuable context to the remote expert. Real-time video can also be shared so that experts can see what their colleagues are seeing to enable speedy and accurate assess-ments. This is faster and safer than a phone call or video chat on a mobile device because the worker retains the use of his or her hands while attention and focus are maintained on the task and not the mobile device.There are also ways to facilitate nding and contacting the correct expert. This is especially important in large, decen-tralized organizations. Internal contact lists enable the user to connect with the foremost expert available through rel-evancy sorting, starting with the origi-nal author of the job and other recent operators. This means the worker and the expert do not need to be working in the same room, the same shift, on the same day, or even know each other, allowing for broader assistance and collaboration regardless of location. It is not surprising that remote expert assistance is a driving force in AR adop-tion during this pandemic where travel is limited and scaled down crews are being utilized.Working Together, RemotelyIn addition to the ad-hoc expert assisted experiences described above, using an AR solution can help teams plan and collaborate on coordinated workows and tasks regardless where team mem-bers are located. Tutorials or instructions assembled via knowledge capture and job templates allow employees to execute planned team procedures while bringing in as many people as necessary. Collaboration through tools like a digital team review means a seamless transition between steps of the job and between individuals on the team regardless of shift overlap. An employee simply puts on the AR headset, divides the work among team members through either assignments or self-assigning steps, and completes the tasks assigned to them, keeping the job on schedule. The whole team can watch the job progress through each step, leave notes for other operators, and invite others, even from other locations, to take over, if necessary. Combined with the live expert assistance mentioned above, using AR collaboration is a valuable solution to facilitate inspections with remote support. One operator could work with one or more remote inspectors in the eld to help them evaluate, check and authorize equipment readiness. This can decrease multiple site visits by different people, reduce travel, and make common equipment checks, rounds and routine inspections much more efcient.No matter what the reason is for a team to work remotely, whether they wind up working different days or fewer employ-ees work per shift to comply with social distancing guidelines, AR solutions enable frontline workers to connect and work together virtually. Thanks to knowledge capture, digital tutorials and digital team reviews, everyone is given a chance to collaborate and everyone is empowered to be an expert.At Taqtile, we believe in the power of expertise to drive business continuity, exibility and resilience. We want to make every frontline worker an expert – especially now – and particularly for the oil and gas industry. We are a pioneer in implementing AR technologies to help capture skilled work instruction, and facilitate knowledge sharing and transfer. We can help your frontline workers become experts.Kelly Malone is chief revenue ofcer at Taqtile, responsible for global sales, partnerships and marketing. He joined Taqtile in 2015 following his role as director of business development at Microsoft supporting the Windows platform team and specically the HoloLens.A software technology veteran, Malone spent over 10 years in a variety of sales, business development and product management roles at Microsoft. He also held sales vice president roles at Accenture and Spring Wireless driving and leading enterprise software sales to Global 2000 companies.Malone has a master’s degree in business administration from the University of Wales. He enjoys cycling and boating throughout the Pacic Northwest. Taqtile’s Manifest platform allows real-time remote and team collaboration. Experts can be joined to a job to provide guidance.

Page 98

Oilman Magazine / September-October 2020 / OilmanMagazine.com96OILMAN COLUMNThe upstream sector of the oil and gas industry is based on the rst stage of a reservoir’s lifetime. This cycle takes into account the processes of exploration, drilling and production of the well; therefore, its task focuses on converting possible reserves to proven ones, achieving a quantication of uid on the surface. Being primarily re-sponsible for a reservoir’s lifetime and subsequent oil well, the upstream sec-tor has undergone changes over time in terms of technology to achieve much lower uncertainty and, at the same time, achieve a prediction of behavior. Seismic Exploration Seismic exploration is based on the travel time of the different waves that occur on the Earth’s crust and that travel to the subsoil. A wave genera-tor, whether controlled explosions or atbed trucks, is used and these waves travel and, at one point, return to the surface where the receivers, strategically placed along the eld, are in charge of reading the waves. During this process, the waves that are sent to the soil and subsoil are:• Compressional wave (P-wave, the ‘P’ stands for primary): This type of wave travels through any ele-ment that can be compressed, and the propagation speed is taken into account. • Shear wave (S-wave, the ‘S’ stands for secondary): This wave travels only through elements that have shear force. This type of characteristic does not exist in uids.• Rayleigh wave: Waves that move the surface up and down.• Love wave: They involve movement of the earth from side to side, per-pendicular to the propagation speed.Technological innovations in this area range from sampling to advanced processing. For seismic readings, receivers that used to be connected to one another by cables were used and all derived from a single source. The readings are usually of several square miles to generate a map of the possible reservoir, and this is where one of the greatest difculties of a seismic analy-sis arises: the total distribution of the receivers. According to the article, “New Tech-nology for Seismic Data Acquisition,” written for Geophysics, Banaras Hindu University, in 2010, establishing the use of receivers of the wireless network (WSN) for subsoil geophysics logs with the use of the innite telemetry system, which is nothing more than the use of each receiver as a radio base station to make the information travel from the subsoil, from a radio base to the next radio base, until reaching the center of the reception, in this case, a computer.What are the Most Relevant New Technologies for the Upstream Sector? By Andres OcandoPhoto courtesy of CareerizmaSeismic exploration before and after. Image courtesy of New Technology for Seismic Data Acquisition, Sunjay, Kumar and Dookia

Page 99

Page 100

Oilman Magazine / September-October 2020 / OilmanMagazine.com98OILMAN COLUMNconditions. This has put the drilling industry one step ahead and has forced it to innovate its methods again.One of the most important steps of the last decade was taken by the company Geosteering Technologies, implementing the acquisition of real-time data while drilling, beyond the data provided by MWD and the LHD. Along with its Geonaft suite, it ensures a stratigraphic reading of the borehole while drilling, providing geo-location, pressure, temperature, detection of uid and, thanks to the operating soft-ware, is able to predict changes in the formation of the structure. This kind of real-time information helps decision making and facilitates the adaptation of drilling uid changes on time. Knowing the stratigraphic sec-tion in real time is a relief and avoids major operational problems. This type of innovation goes hand in hand with the digitalization of the industry. Another pioneer in search of change is Shell, with the fulllment of a dream, drilling its rst monodiameter well in 2001 (and successfully completing its sixth installation in 2015 using the technology at its deep water opera-tions in the Gulf of Mexico). This type of well construction is dened as the construction of an oil well of the same diameter until reaching the target zone, using the new technology of pipes ex-pansion, created by a team of scientists from I+D for Shell in Pinedale, Wyo-ming. Afterwards, engineers installed two sections of consecutive casings of the same diameter in an open well in tough conditions.Its function is to drill a section and coat it with special material. Then, mechani-cal pressure is applied through a steel cone, obtaining an effect similar to the one provided by creating pipes in cold form. After correctly installing this phase, the next step is drilling while maintaining the original diameter of the drill bit.Thanks to the expansion of the metal, the coating that comes next can drill through the new coated area and take its place so that the same process of mechanical pressure is applied to it. This type of technology was tested when the company delivered the rst well in deep water at the Princess-Ursa reservoir in the Gulf of Mexico. One of its advantages is that it enables the draining ratios and makes the most of the production, as well as provid-ing better safety when the drilling is performed. Production SectorThe production of the wells represents the last step in the upstream sector and the objective of exploration and drill-ing operations. Due to the low supply of conventional reservoirs in the world, unconventional reservoirs have become a trend; in turn, unconventional pro-duction has gained ground. Because of this, an old and well-known method re-turned: multi-stage fracturing, this time for horizontal and deviated wellbores and a bare-borehole OHMS system. The application of the OHMS in bare boreholes is based on a multi-stage fracturing in a horizontal or deviated wellbore, isolating each fractured stage from one another with the use of grav-el packs instead of cement. These types of packs are designed with elastomers that extrude against sidewall, creating a seal between the uid and the drilling, as well as a seal for the following areas to avoid the deection of the fracture to unwanted places. A special report by Saudi Aramco in OHMS multi-step fracking. Image courtesy of oil and gas portal

Page 101

Oilman Magazine / September-October 2020 / OilmanMagazine.com99OILMAN COLUMN2011 pointed out the use of the OHMS technology, detailing that the company had 17 active wells with this method. All of them were wells that had been inactive and, with the use of this technology, they managed to put 15 of them into operation. For 2020, there are more than 650 wells that use OHMS, 458 of which were wells that had a low permeability and low production rates.For the application of this technique, Saudi Aramco combined stresses with the use of geomechanics to hydraulic fracturing, knowing in this way how much pressure the gravel packs used to isolate the areas must resist. Addition-ally, with the knowledge of the physi-cal properties of the rock, the extent of the fracture within the reservoir can be inferred. The upstream sector is the rst of the steps to materialize crude into money and, in turn, it indicates how much it will cost to convert it by obtaining an investment/prot ratio. For this reason, technologies do not stop, and every day an innovative and cost lower-ing product becomes more necessary. Despite the fact that drilling is the highest money spending step of this sector, it also becomes the most cru-cial; a bad drilling practice will mean the loss of hundreds and, in some cases, even millions of dollars.This is one of the reasons why many engineers around the world are resis-tant to changes in drilling, and it is difcult to open up to new options, but the world keeps turning and more options are available every day. Andres Ocando is a 30-year old petroleum engineer that has been working for PDVSA for ve years, facing positions such as reservoir engineer and geomechanical engineer. He currently works as a project analysis engineer. There, Ocando has optimized the data collection process for the development of geomechanical models.He has experience in copywriting, as he is currently a technical writer on topics related to the oil and technology industry. He collaborates for important technical magazines such as OILMAN Magazine and SPE. Quality and responsibility are two words that describe him perfectly. Ocando is currently pursuing higher studies at the University of Zulia to obtain a master’s degree in petroleum engineering. Saudi Aramco OHMS. Image courtesy of SchlumbergerADVERTISE WITH US!Are you looking to expand your reach in the oil and gas marketplace? Do you have a product or service that would beneﬁt the industry? If so, we would like to speak with you! We have a creative team that can design your ad! Call us (800) 562-2340 Ex. 1 OilmanMagazine.com/advertise Advertising@OilmanMagazine.com

Page 102

Oilman Magazine / September-October 2020 / OilmanMagazine.com100OILMAN COLUMNAs business leaders in the oil and gas industry come to terms with the “new normal” of remote work-ing, digital-led interactions, and increased uncertainty, Craig Hay-man, CEO at AVEVA discusses how the company is helping teams to navigate the challenges and opportunities that the macro-eco-nomic downturn is creating.As a company focused on accelerating digital transformation, success in a post-COVID-19 world will be about more than connecting the workforce, shifting to IIOT-enabled operating models, and thinking differently, both in terms of scale and how we approach business challenges. To this end, at AVEVA we believe that two transformative opportunities, namely the Cloud and articial intelligence, known as AI, will change how oil and gas organizations drive successful business outcomes.AI has been around for more than 30 years, and it’s becoming broader and more sophisticated. This is important because it enables companies to ac-celerate how they work. With unied smart analytics that span complete data stacks, teams can leverage math-ematical thought processes across all their activities. This gives individuals scale and capacity that they would not otherwise have: knowledge, data-led intelligence, the ability to spot oppor-tunities. It enables people to make bet-ter decisions, and to use smart systems to recommend courses of action, that enhance the capabilities of the human workforce. AVEVA’s broad portfolio enables us to infuse AI into our products and portfolios making them smarter, and we’ve been doing this for 15 years in the maintenance and asset performance space with predictive analytics. Today we can also integrate those individual products, connecting the different AI modules together into a broader intelligence using the Cloud.As we integrate systems, we can use the combined analysis to generate more complex insights and recom-mendations for the human workforce. This allows teams to do more complex things, and to execute them quickly. Because it is all delivered through the Cloud, we can leverage the breadth of AVEVA’s whole portfolio; the Cloud is the glue and AI is the intelligence that underpins better decisions.How Can AI Deliver Sustainable Value?An AVEVA customer in the oil and gas sector is using AI on both rotat-ing and non-rotating equipment and achieved savings of more than £4 mil-lion (~$4,333,000 million) in a single catch [because] an operational failure was avoided, thanks to articial intel-ligence. Now, we are starting to see AI applied to manufacturing where we are nding that AI-infused MES can boost efciency and enable teams to identify issues not previously seen with the human eye. For example, using fault diagnostics AI can help identify the fault and use predictive asset strat-egies to connect the dots and provide mitigation recommendations that keep plants running more efciently.Another great example is a company which is using next-gen predictive maintenance to leverage AI-driven simulation and forecasting to get a 360-degree view of risk and improve decision-making throughout operations. Once an issue is identied with predictive maintenance, the Why AI Will be a Game Changer for the Global Oil and Gas Sector By Craig HaymanPhoto courtesy of AVEVA

Page 103

Oilman Magazine / September-October 2020 / OilmanMagazine.com101OILMAN COLUMNteam can ask: can we make it to the next planned outage, or do we need to schedule an emergency maintenance shutdown? During the forecasted remaining useful life of an asset, when is the optimal time to perform maintenance in order to minimize adverse impacts on operations and associated costs? What is the likely impact of a particular outage and what prescriptive actions should we pre-emptively take to mitigate it? This next-gen technology is transforming how the team can produce energy and deliver to customers, driving efciency and sustainability.In the past we had narrow AI, which was infused into various products, and now we can use the Cloud to leverage AI that spans the whole portfolio. This broader AI is the rst step toward AI general intelligence – the ability to make a complex decision using different types of AI, the ability to learn something and apply it in another situation. This is a continuum, and it’s exciting to see the progress already being made. With the shift to digital business models following COVID-19, we see this trend accelerating, and we’re already working with customers across the globe to make that happen. For more information on AVEVA’s AI portfolio, visit: www.aveva.com/en/solutions/digital-transformation.Craig Hayman joined AVEVA in February 2018 as chief executive ofcer. Previously he was chief operating ofcer at PTC Inc., where he had responsibility for engineering, marketing and sales. He also served as president of the Solutions Group. At PTC, Hayman returned the digital engineering business to growth, revitalized the partner network, and successfully introduced a new generation of Industry 4.0 connected manufacturing applications. Prior to joining PTC, he was president of eBay’s enterprise business and served more than 15 years in senior leadership positions at IBM. Hayman holds a BSc. in computer science and electronics from the University of London. Lightning Strikes in the PermianThis photo sequence is courtesy of reader Christopher J. Riojas, an employee of Progress Drilling for 20 years. Riojas has spent his entire ca-reer from the age of 18 with Progress and has never worked anywhere else. During his time with the company, he has worked corner, thrown chain and worked on derricks. At the age of 23, Riojas became a driller and for nine years worked on Rig 1 & Rig 3. He became a tool pusher at 32 and then a rig supervisor. Riojas says he enjoys his job and credits Progress Drill-ing with helping him in his career. He would like to thank owner James Montgomery and operations eld manager Dana McNabb for their help on and off the job and says, “I consider them family.” He also would like to thank McNabb and company man David Spooner for being his mentors from the time he was a driller. Riojas took these photos in Taft, Texas, on May 16, 2020, at 4:30 AM while moving drill pipe trailers to the front of the location.

Page 104

Oilman Magazine / September-October 2020 / OilmanMagazine.com102OILMAN COLUMNThe Crude Life engages with industry experts and energy enthusiasts every day with interviews, radio programs, social media posts, print features, video content and podcasts. These conversations range from CEOs to truck drivers to authors to engineers to café owners. Just like our diverse experts and interviews, the conversations have depth and worldly experience.“There are so many ways to invest in the oil and gas business as far as oil wells go. From going out and acquir-ing leases to buying interest in wells, to buying interest in partnerships that own interest in wells and, in some cases, you can buy partnerships that have interest in partnerships that have interest in wells. There is something out there for everyone, which is great. The risk tolerance and the level they are willing to take is important. Our typical investments run around $100,000 so it’s not for everyone and we generally advise people that if they can’t afford to lose that money, don’t do it. A lot of opportu-nity in East Texas and Haynesville right now. They are longer, though. When you are looking at gas heavy elds, which are really good, it’s just the price has been down for so long and I don’t think it’s going to change anytime soon. I think it will take four to ve years, which seems like an eternity in this business right now. It’s just a differ-ent look at it.”Brandon Davis, CEO, Swan Energy“[Using CARES ACT money to plug wells in the Bakken] workover rig operators told us it’s actually requiring 50 full-time employees to keep up with each one of those workover rigs. We thought that we would employ 600 at 20 rigs; we are actually at 700 with 14 rigs and will push that to about 900 next week. We thought that each reclamation program would probably employ 12 full-time people; we are now informed that is more like 30. So when we get going with the reclamation side, we had anticipated we might employ 600, we are actually going to employ 800-900 people full-time.The benets are going to be larger and spread over lots more small communities.”Lynn Helms, Director, North Dakota Department of Mineral Resources“The U.S. Court of Appeals for the D.C. Circuit ruling today on the Dakota Access Pipeline represents another victory in the ght for North Dakota energy. On the day DAPL was originally ordered to be shut down and emptied, we receive another assurance the pipeline can keep playing its important part in bolstering America’s energy dominance. I hope all sides will continue to work toward a solution everyone can accept.”U.S. Senator Kevin Cramer (ND-R)“President Trump’s EPA has taken another important step in curbing the regulatory excesses of the previous administration. Today’s actions by the EPA are a recognition that the Obama-Biden methane rule was duplicative, costly and unnecessary. Cleaning up the 2016 methane mess will allow our independent natural gas and oil producers to continue to provide American families with the low-cost gasoline and clean burning electricity that powers our lives. The numbers tell the story. From 1990 through 2015, a year before Obama-Biden methane rule was nalized, natural gas production in the U.S. went up by 55 percent, while methane emissions from natural gas production went down by 23 percent. Recent data on methane reductions for the Permian and Appalachian basins is even more dramatic and further proof that the hysteria from the green left and the media surrounding this rule is completely unwarranted.”Thomas Pyle, President of the American Energy AllianceLiving the Crude Life By Jason Spiess

Page 105

Oilman Magazine / September-October 2020 / OilmanMagazine.com103OILMAN COLUMN“[In some cases] it’s not about decreas-ing manpower, it’s spreading manpow-er out. Instead of these large Halli-burton, Schlumberger size companies, now we start having smaller compa-nies that are not thousands to tens of thousands of employees, but less than hundreds of employees or even [in] the teens where you can operate more efciently, lower overhead, keep your debt interest down and acquire the equipment at a low cost.”Luke Daniels, CEO, Core Well Commercial Capital“People think that somehow in states like North Dakota this is a simpler thing. I’ve been involved in energy projects all around the world. California, in the United States, is considered the toughest, and I would say what North Dakota put us through is every bit as tough as what you would face in California.”William Prentice, CEO, Meridian Energy Group“Largely undened, and heretofore largely unregulated,” he noted, “ESG (environmental, social and governance) invest-ing is favored among left-wing activists seeking social and political change through corporate action. And it’s being done with other peoples’ money without their knowledge.”Justin Danhof, Director, Esq. National Center Free Enterprise Project“On the offshore side there has definitely been a lot more chatter in moving that way. The main push back I have heard is the amount of capital it takes to do those projects offshore. On automation and safety, there have been so many hot spots as far as high risk, or hot zones, is what I am trying to say, because there are hot zones that people have to put their body into and have to have a hot work permit in order to go into those areas.”Joseph “JB” Bendik, CEO, The Navatis OrganizationThe Crude Life podcast can be heard Monday through Thursday with a Week in Review every Friday. For more info, visit www.thecrudelife.com.Jason Spiess is a multi-award-winning journalist, entrepreneur, and content consultant. Spiess has over 30 years of media experience in broadcasting, journalism, reporting, and principal ownership in media companies. Spiess has also worked as a guest correspondent for a number of local and global news organizations from 660 KEYZ-AM Williston to CNBC to the BBC World. Spiess is a full-time father, cancer survivor, environmentalist, author, North Dakota native, and graduate of North Dakota State University. ADVERTISE WITH US!Are you looking to expand your reach in the oil and gas marketplace? Do you have a product or service that would beneﬁt the industry? If so, we would like to speak with you! We have a creative team that can design your ad! Call us (800) 562-2340 Ex. 1 OilmanMagazine.com/advertise Advertising@OilmanMagazine.com

Page 106

Page 107

Page 108

Page 109

107SEPTEMBER — OCTOBER 2020PUBLISHER Emmanuel SullivanEDITOR-IN-CHIEF Rebecca PontonMANAGING EDITOR Sarah SkinnerASSISTANT EDITOR Eric R. EisslerASSOCIATE EDITOR Tonae’ HamiltonGRAPHIC DESIGNER Kim FischerCONTRIBUTING EDITORS Vic Brown Kerrine Kafwembe Bryan JoAnn Meyer Amanda Rico, PhDADVERTISING SALES Eric Freer Diana GeorgeTo subscribe to Oilman Magazine, please visit our website, www.oilmanmagazine.com/subscribe. The contents of this publication are copyright 2020 by Oilman Magazine, LLC, with all rights restricted. Any reproduction or use of content without written consent of Oilman Magazine, LLC is strictly prohibited.All information in this publication is gathered from sources considered to be reliable, but the accuracy of the information cannot be guaranteed. Oilman Magazine reserves the right to edit all contributed articles. Editorial content does not necessarily reflect the opinions of the publisher. Any advice given in editorial content or advertisements should be considered information only.CHANGE OF ADDRESS Please send address change to Oilman Magazine P.O. Box 42511 Houston, TX 77242 (800) 562-2340Cover photo courtesy of Aera Energy, LLC Inside back cover courtesy of Dan Dunn www.paintjam.com – 416-931-3643Kerrine Kafwembe BryanA fellow at the Institution of Engineering and Technology (IET), Kerrine Kafwembe Bryan is also a lead power systems engineer at WSP USA, and co-founder of Buttery Books, an independent publishing house that produces children’s storybooks, that aim to tackle the lack of diversity in industry at the grassroots level. Bryan will be writing OILWOMAN’S diversity, equity and inclusion (DEI) column. Connect with her on LinkedIn at www.linkedin.com/in/kerrine-bryan-p-e-399baaaAmanda Rico, PhDAn editorial specialist and resume expert, Amanda Rico, PhD, helps senior and executive-level professionals optimize their career proles, pivot to alternative career paths, land jobs and level up! Currently a columnist for the Houston Business Journal, she writes on the intersection between career trends, job search strategies, and the energy and petroleum industries. Dr. Rico, who holds a PhD in English from Texas A&M University, will be writing OILWOMAN’S Competitive Edge column, providing accessible, actionable advice to E&P pros, starting with the Nov/Dec issue. Connect with her on LinkedIn at www.linkedin.com/in/amandaricophdJoAnn Meyer & Vic BrownJoAnn Meyer is a change consultant with 30 years in the energy sector. Vic Brown is a content writer and strategist for tech, AEC and other sectors. Together, in their upcoming Nov/Dec column, Uncomfortable Conversations, these two friends and writing partners discuss their own perspectives on DEI solutions in the workplace, both those that help us do better and some that only help us feel better without affecting real change. To learn more about Meyer, visit www.previseconsulting.com and connect with her on LinkedIn at www.linkedin.com/in/joann-meyer-previse. To learn more about Brown, visit evictorbrown.com and connect with him on LinkedIn at www.linkedin.com/in/evictorbrownLETTER FROM THE EDITOR-IN-CHIEFCONTRIBUTORS — BiographiesRebecca Ponton, Editor-in-Chief, OILWOMAN MagazineWelcome to the preview of OILWOMAN Magazine! One short year – and, yet, a lifetime – ago, after a mutual friend introduced us, I wrote my rst article for OILMAN Magazine and now, thanks to the bold and innovative thinking of Publisher Emmanuel Sullivan, we’re unveiling the companion publication, OILWOMAN Magazine. There are not a lot of entrepreneurs who would start a new venture in the midst of a worldwide pandemic but, as Aera Energy President and CEO, Christina Sistrunk, told me when we talked for our feature interview, you have to be willing to bet on yourself.When I wrote that rst article for OILMAN, I asked Sullivan – only half-joking – “What about OILWOMAN?” To my surprise, he said it was something he had been thinking about. While I was thrilled to hear that, as there is no other publication specically devoted to women in industry, I didn’t expect it to happen any time soon and certainly not once COVID-19 upended our industry and the world. Imagine my further surprise when he set a rm date for a sneak preview to introduce OILWOMAN to the industry and, really, anyone who is interested in women’s stories and achievements.In this issue, Christina Sistrunk reects on a lifetime career in the energy industry and a new era in her personal life as she prepares to step down as president and CEO of Aera Energy and embark on new adventures. Engineer and author Kerrine Bryan asks whether there is a case to be made for greater diversity being one of the rare positive effects of COVID-19. Our Q & A with Abigail Hopper, president and CEO of Solar Energy Industries Association (SEIA), kicks off our regular feature on renewable energy. And freelance health writer Denise Porretto’s article on what energy companies are doing to promote National Breast Cancer Awareness Month in October is an important reminder to schedule regular mammograms.We’re looking forward to discussing relevant topics facing our industry and specically women and other minorities with thoughtful commentary from our contributors. JoAnn Meyer and Vic Brown debut their Uncomfortable Conversations column; Amanda Rico, PhD, will offer career advice in Competitive Edge; and Kerrine Kafwembe Bryan will continue to share insights on diversity, equity and inclusion in the November premier edition of OILWOMAN. Look for an interview with Houston artist Dan Dunn about the mystery woman in the hardhat in his painting which closes out this preview. And in an industry where it’s still big news for a woman to be named CEO, we can’t wait to reveal our next feature interview!Follow us on social media as we continue the conversation with the women who broke down the barriers and led the way for the rest of us, and the up and coming generation of female leaders we’re betting on to lead us into the future. OilwomanMagazine OilwomanMag Oilwoman Magazine

Page 110

Page 111

Oilwoman Magazine / September-October 2020 / OilwomanMagazine.com109OILWOMAN FEATUREthe family acquired when he was discovered under the deck of their home in New Orleans as they were rebuilding after Hurricane Katrina. “His vet says he won the kitty lottery – our daughter would bring him to visit us when we lived in Europe. So, from feral rescue to world traveler, he’s one of the family.” Sistrunk has generously found time in her schedule to talk less than two months before she retires after nearly 40 years of a successful career in oil and gas, an industry that has seen few women reach the top. “In fairness to my two predecessors,” she says, referring to founding President and CEO Eugene Voiland (1997 – 2007) and his successor, Gaurdie Banister, Jr. (2007 – 2015), “I think each of them, in some ways, leveraged their experiences to build the foundation at Aera that I walked into.”Both Banister, as the company’s rst African American president and CEO, and Sistrunk as its rst female president and CEO, broke barri-ers, although that was not a unique situation for Sistrunk (and, undoubt-edly, not for Banister either). “For a large portion of my career, it’s not been unusual for me to be the only woman, or one of a few, in the room.” Given that, she says, “I think my approach to the business has been a bit different, but I think every CEO at this company has brought their full breadth of experience, what uniquely made them successful, and has invested that in the company, and that’s how we continue to evolve and get stronger.”Sistrunk acknowledges that being a female CEO has had an effect on company culture and believes Aera has become more diverse under her leadership. “We may be the only oil and gas company I know of that has a majority of women on the senior leadership team. And, in fact, until a recent board transition, we had a six-member board of managers, half of which were women.” (According to research published by the Harvard Business Review in July 2020, only seven percent of oil and gas JVs board directors are women, making Aera a rarity.)Sistrunk attributes this to her pri-oritization of talent development. “During my tenure, I’ve really fo-cused on developing our leaders to be more capable, more effective at employee engagement, more open to really understanding what their people need to be successful, and more focused on employee develop-ment.” While this is benecial to all employees, it is critical to attracting and retaining women and other mi-norities in an industry whose work-force still lags behind that of others in terms of diversity. (According to McKinsey’s Women in the Workplace 2018, women make up only 15 per-cent of the oil and gas workforce.) “If you want to innovate, and you truly want to attract and retain the best talent, you’ve got to [make that your focus].”She also wants women, whom studies have shown are more risk averse than men, to be willing to “bet on themselves,” which is exactly what she did when she decided to leave a 16-year career at Amoco to take on a role at Shell. “That was a very, very hard decision for me,” Sistrunk says, because of the relationships she had developed over time and the reputation she had established for herself within the company and the community.“I didn’t know anybody at Shell, and they didn’t know me or what I was capable of. One of my mentors actually asked me to check whether I was making my decision based on fear or on what I aspired to create?”Convinced she wasn’t going to have the level of opportunities at Amoco that she wanted to have in the long-term, and with her mentor challenging her to take a leap of faith and believe in herself, Sistrunk A New Aera For President and CEO Christina SistrunkBy Rebecca Ponton Continued on next page...Sistrunk accepts the Corporate Philanthropist of the Year Award from Bakerseld College Foundation Executive Director Tom Gelder and Bakerseld College President Dr. Sonya Christian. Photo courtesy of April Massirio

Page 112

made the move. “While I’ll never know what would’ve happened had I chosen to stay, I do know that I’ve gotten to do work that was more challenging and more rewarding than I ever imagined because I was willing to bet on myself.” That phrase is something her longtime mentor has told her more than once and she is thankful to have been able to seek his advice and counsel for 25 years. Even now – especially now – as CEO, she says she needs that outside guidance. “The role is different, certainly, and has different demands, but the need to network and to continue to challenge your thinking becomes more important than ever.”California, a state with over 39.5 million people, uses a hundred percent of all local oil production and imports an additional 70 percent of the oil it consumes every day. Aera produces nearly 25 percent of the state’s oil and gas from its operations located in the San Joaquin Valley – Kern County is one of the nation’s largest oil-producing regions – and additional elds in Fresno, Monterey and Ventura counties.While Aera fully supports the state’s climate ambitions, Sistrunk believes, “California’s going to continue to need locally-produced oil that is delivered at the highest safety and environmental standards in the world for decades to come. I don’t think the transition is going to come as fast or as easily as they would like.” Taking into account the amount of oil the state uses, she is convinced consumption would have to fall considerably to eliminate the need for local production.In addition, she says, “California’s an energy island, really. None of the oil production in the rest of the U.S., particularly in Texas, crosses the Rockies – none of that comes west, because the pipelines don’t exist. Some of the imports that California uses come from Alaska, but Alaska’s production is falling. Increasingly, the imports are coming from Saudi Arabia and Iraq, and so it’s a very interesting situation.”Another issue California is facing is how to handle carbon capture and storage, in order to meet its greenhouse gas reduction targets in the long term. As Sistrunk points out, the oil and gas industry has capabilities to deliver carbon capture and storage (CCS) but, of the 10 facilities in the U.S. (with a number of others in various stages of completion), none are located in California. “Aera’s taking a multi-decade view of how we can continue to provide the energy that the state needs to get food on the table, and make sure all of us have the ability to enjoy the quality of life that we expect in California in a cost-effective [manner]. Aera’s got a role in continuing to provide that energy in the safest, most environmentally responsible way, with an increasingly improving carbon footprint in the process.”Ultimately, Sistrunk believes that’s possible, but says, “We’re going to have to evolve, and adapt, and innovate, and use new technology to continue to reduce our carbon footprint while we do that.”As the industry is slowly coming to realize, one of the best ways to solve the issues it faces is with a workforce that is diverse in thought and experience and myriad other qualities that spark innovation while being inclusive of those outside the dominant group, which traditionally has been white males.“Inclusion is a set of behaviors that we need to consistently exhibit, so that everyone is heard, valued, and has a chance to contribute,” Sistrunk says. “And diversity is all the ways OILWOMAN FEATURESistrunk and Aera SVP of Operations Andy Anderson tour Belridge oil eld. Photo courtesy of Aera Energy, LLC110Oilwoman Magazine / September-October 2020 / OilwomanMagazine.com

Page 113

OILWOMAN FEATUREin which we’re similar and different. Without real inclusion, it’s likely that our diversity will actually divide us.”Because Aera has a female CEO, a female board chair, Sinead Gorman, and a female-dominated leadership team, Sistrunk says people may see that as representative of the com-pany’s diversity; however, diversity incorporates so many other metrics.A number of companies have started putting the emphasis on “inclusion,” calling it I&D, when they talk about their DEI initiatives and Sistrunk says that’s always been the case at Aera. “We’re continuing to learn and evolve by focusing on how we improve inclusion and understanding at every level of the organization. That’s critical for us when we’re thinking about how we recruit talent, how we develop that talent, how we use the capabilities of everyone to continually reinvent how we work – not only to meet our nancial expectations, but our people live in the communities we operate in. So, when we think about those expectations for safety performance, environmental performance, and social responsibility, it’s what our families, and our neighbors, and our friends expect from us.” “I am so thankful I’m surrounded by a team that really does have the ability to think about the issues we’re facing through a number of different lenses because we do have that depth and breadth that comes from having so many different experiences sitting around the table.”The ability to approach a problem from different angles couldn’t be any more imperative than it is now as Aera – like the rest of the industry, the country and the world – deals with the disruption caused by COVID-19. Prior to March 12th, Sistrunk says Aera had virtually no history of work being done remotely. “On Friday, March 13th, we made the decision to shut down most of our ofces and move over 70 percent of our workforce to remote work. By Monday morning, we were up and running.” “We do believe that collaborating, mentoring, learning from each other, and just reinforcing our sense of community – which has always been so strong at Aera – is actually a big part of our value proposition for our employees.” Sistrunk is also convinced one of the reasons working remotely has been successful is because Aera had cultivated a strong company culture to begin with. She acknowledges that the longer people are separated, the harder it will be to maintain that sense of community and believes it will necessitate developing some type of hybrid work model in the future. As the industry searches for new paradigms, the current crisis has also required leadership to be more at-tuned to the needs of its employees, including those in the Latino and Black communities disproportionate-ly affected by the health crisis, as well as the Asian community, which has faced discrimination because of the origins of the virus. There are em-ployees who have family members on the police force during this time of social unrest; others may be at-risk or are caretakers of someone who is. In addition, because the industry is considered essential, Sistrunk says about 30 percent of their workforce has continued working on-site every day. “It’s being sensitive to all of that and I actually think we’ve grown our level of employee engagement. The foundation we had [pre-COVID] was critical.”“One of the things that I have so appreciated about working in oil and gas for close to four decades now, is I can name so many examples where I’ve worked with others to tackle problems that we did not think were solvable – and we found solutions. We have adapted technology and innovated, and we have continuously improved both our safety and environmental performance. I actually have great condence that we’re going to nd our way to the other side and be stronger based on what we learned together in the process of responding to this challenge.” Christina Sistrunk shares insights at a Women in Energy event held at Aera’s facility in Bakerseld, CA. Photo courtesy of Aera Energy, LLCContinued on next page...Oilwoman Magazine / September-October 2020 / OilwomanMagazine.com111

Page 114

Page 115

Page 116

Oilwoman Magazine / September-October 2020 / OilwomanMagazine.com114OILWOMAN COLUMNMy two young daughters and I were stranded on vacation in the U.K., separated from my husband for ve months during this crisis, while he was at home in New York. When we nally were reunited, a new reality hit. Like many parents, my husband and I now had to navigate working from home while trying to care for, and entertain, a toddler and a nine-month-old baby. I reected on our rst day and noted that, although the domestic tasks seemed evenly split, my work time was interrupted more often than my husband’s. This trend was reported by the World Economic Forum. For many hetero-sexual couples like us, this “easy fall” into ingrained gendered roles isn’t conscious behavior; it’s actually how society has conditioned us. My husband and I soon came up with a plan to x the issue. The rst thing is to bring it up for discussion (which I’m not scared to do). Then we agreed on a system ensuring that, when one of us had a scheduled meeting or call, the other would watch the kids. If there was a clash, we would take turns to rejig our schedules accordingly. We also agreed to alternate days for being the main parent responsible for watch-ing the kids in a work week. However, many families have struggled for months without a resolution or decent compromise, with some women feel-ing like they’ve regressed to the 1950s, assuming mother, teacher, cleaner and caretaker roles all at once and – in most cases – while also balancing a salaried job. A report by McKinsey makes for sober reading: “Given trends we have ob-served over the past few months, in a gender-regressive scenario in which no action is taken to counter these effects, we estimate that global GDP growth could be $1trillion lower in 2030 than it would be if women’s unemployment simply tracked that of men in each sector.” Gender imbalance has a clearly negative economic impact, affecting the bottom line for many companies irrespective of sector. The energy industry (particularly oil and gas), where companies are owned and predominantly run by white males, continues to grapple with diversity, equity and inclusion (DEI). Globally, women account for less than a quarter (22 percent) of employees in the oil and gas industry and about 35 percent of the renewable energy industry. These percentages shrink considerably for senior and technical roles. Yet, at the same time, the industry is strug-gling with a skills gap problem as it strives to attract and retain women and ethnic minorities. While recent surveys indicate that men are actually taking more of an active role in domestic work at home, women continue to assume the lion’s share of both household chores and childcare. Given that this is a systemic issue – reinforced by societal structures that govern working hours and work poli-cies around parental leave that assume mothers are the natural caregivers – many more generations will pass before real parity translates at home and in the workplace. Indeed, these barriers have prevented women from pursuing roles in industries that ultimately force them to choose between family and careers. The energy sector is no exception; and if there is a shortage of women engineers in STEM industries now, this is bound to have been perpetuated by the inexibility of workplace policies that exclusively benet men and the child-free. Until parental leave is seen as of equal importance and a job that requires the presence of both parents, and so Greater Gender Diversity – A Rare Positive Change to Emerge From the COVID-19 Crisis? By Kerrine Kafwembe BryanWaiting to be interviewed at the BBC World Studios in the U.K.

Page 117

115OILWOMAN COLUMNlong as employers continue to remain inexible in supporting employees who have children, we will never see progress in equality happening as fast as it needs to in order to invoke meaningful social change. The COVID-19 pandemic has forcibly thrust upon us, as employers and employees, the phenomenon of remote working. Businesses and teams that were largely ofce-based had to adapt rapidly in order to make working from home both a plausible and productive undertaking. Pre-pandemic, exible working was considered a perk given to employees at forward-thinking businesses. You didn’t have to look far to see how even the act of asking for exible working arrangements could hurt your career prospects as your dedication, loyalty and ambition came into question. Dispelling misconceptions around exible working probably will be one of the most positive developments to emerge from this crisis. Businesses, previously hesitant to offer exible working arrangements, now have little excuse to refute such practices when things return to “normal,” particularly if the benets of employee engagement, retention and wellbeing are tangible.Personally, the ability to work exibly was a huge factor in my deciding to go back to work after having children. Work can give us a sense of worth and purpose, but individuals should never be made to feel that they have to choose between success in their career and paying the bills versus bringing up a family when both are so important. Thankfully, we live in an innovative time where technology has enabled us to carry out tasks that normally would require a physical rather than a virtual presence. Flexibility doesn’t only be-come a practical act but an economical-ly rational one, too, where money spent on travel is saved. In the energy sphere, technology is being used to undertake virtual site visits – such as that used by DNV GL – to help organizations carry out required inspections. Travel restric-tions and quarantine challenges can be circumvented by a whole suite of tools we have at our disposal. These changes to work infrastructures can have a transformative effect on gender diversity, equity and inclusion within the homogeneously-staffed energy industry. Organizations and industries continuing to work in this way could again save money and, at the same time, encourage more women into roles within STEM industries, simply through embracing exible working practices. The money saved could then be put into mentoring programs and employee resource groups (ERG) that foster diversity, equity and inclusion.As more women enter the industry, this can only encourage other women to follow suit.I entered the energy sector as an engineer immediately after completing study. Although I wasn’t put off from pursuing this line of work, I can readily see why many other women would be deterred from embarking on a career in a male-dominated eld. The more women (and young girls) see other women working in roles normally assumed by men, misconceptions around what constitutes a man or woman’s job will be addressed. By the time my daughters enter the working world, I am condent that industries currently lacking diversity on every level will be fewer than today. Progress is being made, but I don’t think the job will ever be nished. It takes a persistent combination of education and experience to bring down barriers and dismantle antiquated systems that cause inequality and bias. It’s a big job, but one where both men and women can work together to make this vision a reality – sooner rather than later. Kerrine Kafwembe Bryan is a fellow at the IET, a lead power systems engineer at WSP USA, and co-founder of Buttery Books, an independent publishing house that produces children’s storybooks that aim to tackle the lack of diversity in industry at the grassroots level. As my family discovered, virtual bedtime stories can help parents and children stay connected when families are separated due to COVID-19 travel restrictions. (My husband, Mwansa Kafwembe, at home in New York, read to the girls while we were in the U.K.)

Page 118

Oilwoman Magazine / September-October 2020 / OilwomanMagazine.com116OILWOMAN COLUMNAbigail (Abby) Ross Hopper’s career has spanned the energy spectrum from wind to fossil fuels and now to solar, as president and CEO of the Solar Energy Industries Association (SEIA), since January 2017. She talks to OILWOMAN about the current state of the solar industry as it deals with the COVID-19 pandemic and why she believes solar will help lead the energy transition.Rebecca Ponton: You worked in wind energy when you were with Maryland Governor Martin O’Malley’s ofce and fossil fuels when you were the Director of the Bureau of Ocean En-ergy Management (BOEM). You’ve got this wide breadth of experience in energy. How did you become in-volved in the solar industry?Abby Ross Hopper: When I was leaving BOEM, I surveyed the energy landscape. I knew I wanted to continue to be involved in energy because it’s just such a fascinating area, and also at the intersection of policy and politics because that’s just a fun place to be. From my judgement, solar is going to be one of the key drivers of our energy transformation, and I think there’s some really broad consensus in our nation that we need to move to a cleaner energy system. Solar, offshore and land-based wind, are going to lead that transformation, so it made sense to me to be a part of one of the fastest growing, innovative energy sources in the world. There is an entrepreneurial spirit in solar that sets it apart from other sectors I’ve worked in. It is an incredibly exciting industry. Part of that is because it serves different markets. There’s a sector of it that’s focused on residential; homeowners want to have more control over their own energy source. There are corporations that want to save money and have made commitments. There are utilities [whose] customers are demanding it and it’s the lowest cost option. So, there are all of these different segments and customer bases, and that means it’s really a dynamic industry. RP: What role is solar going to play in the energy transition?AH: I think it’s going to lead the transi-tion to a clean energy economy. If we look back over the last ve years or so, solar was either the number one or number two source of new electricity generation. What’s actually being built now? What are investors investing in? Solar. That’s only going to increase. We do a ve-year forecast that’s updated every quarter and – I have to say every-thing with an asterisk because of the impact COVID-19’s having right now – but directionally, our trajectory is up; we will continue to grow for the foreseeable future. RP: What do you feel like is the big-gest obstacle, then, to solar being more widespread?AH: One is really around the disruptive nature of solar. If we think about the market rules and the utility construct that have been in place for a very long time, they were set up for large power plants that only distributed energy from the power plant to the consumer. Obviously, a lot of our distributed generation re-quires two-way ow. So, the system itself can be challenged, but also the market rules. We have tons of big power plants that deliver from a large power plant to the customer, but the rules around access to the market, access to interconnection, and what we can bid on in the wholesale markets, were also written when solar didn’t really exist; they were written for fossil fuels. And so, we spend a lot of time in the regulatory space, making sure that the marketplace that we operate in is cognizant of our technology, and we can compete there. That’s one thing – evolv-ing both the actual system – the business model – and the regulatory and policy framework, to reect this new technology. And the second thing I would say is our prices. The price of solar has dropped so dramatically, about 70 percent.It’s amazing. People often, understand-ably, have an outdated view that it’s an expensive source of energy, and that people go solar because they want to save the planet, but that you have to be wealthy and have disposable income to do it. That’s not the case anymore. We compete in requests for proposals (RFPs) that utilities put out, and we can beat the price for other generators. There’s a pub-lic education campaign [component] as well, so that consumers really know, not In the Hot Seat: Solar’s Abby Hopper By Rebecca Ponton

Page 119

117OILWOMAN COLUMNonly are we saving carbon, and creating jobs and investments, we’re also saving money because we’re going to provide you affordable power.RP: Would you say the biggest misperception about solar is price and affordability?AH: I would. Also, I live in the world of politics. There is a misperception that solar is a Democratic [with] a big D – a Democratic Party issue. Two summers ago, we looked at where solar is built in the country by congressional district, and it was about half Republican, half Democratic districts. If you look at the top ten solar states for installations, some have Democratic governors, some Republican. We’re in this big lobbying effort right now. We just had a letter supporting our request from Congress: 25 Democratic congressmen and 25 Republican. The state of North Carolina is the number two state for solar in the nation, which surprises some people. Thom Tillis, the Republican senator, knows how much investment solar brings to his state, and so he is very supportive. So, I would say that’s the other misperception; if folks aren’t following it, they assume that it’s just liberals that care about it.RP: It’s a non-partisan energy.AH: It is. I just had a conversation with Bill Cassidy, the Republican senator from Louisiana, whom I obviously talked to at my BOEM days, and we talked about solar because it is a really important part of a balanced energy portfolio. RP: What do your lobbying efforts entail and what kind of reception do you get?AH: Pre-COVID, we were on track to have a record-breaking year in terms of how much solar was built in the United States. We started 2020 with about 250,000 people employed in the solar industry in this country. We anticipated adding 50,000 more people this year [for a total of] 300,000 employees; instead, we lost 72,000 employees in four months. People got laid off because of COVID. We are lobbying for some xes to our tax credit to really allow us to be able to use it more effectively when the rest of the economy is crashing down around us. RP: How is the solar industry weath-ering, no pun intended, the crisis? It may be a misperception to a certain extent, but I would think so much of the work occurs out in the eld, in-stalling panels. Can a lot of that work be done remotely? Is it digitized? How has the industry adapted?AH: Our companies have evolved quick-ly to put the CDC guidelines into place. We can social distance and install safely. What’s harder to do is door-to-door sales, and going into people’s homes, if you’re doing it on the residential side, to inspect their electrical boxes. On our commercial side, we do a lot on schools, and hospitals, and universities and, espe-cially at the beginning of COVID, they [didn’t] want anyone on their property, so there were some real issues with work stoppages. Not because we couldn’t put the panels in place safely, but because it was part of a more complex system. Our companies have moved quickly to online sales, to virtual meetings for the customers, to online permitting. Our products have to be inspected, and all of those inspectors are working from home, so we’ve made progress in making that more efcient. What we’re seeing now, though, is that the tax credit, especially for the large-scale projects, is incumbent upon tax equity. Companies and banks that have a tax liability want to use the tax credit to offset that. Banks just had their worst Q2 since the Great Recession. So, the availability of that tax credit is shrink-ing dramatically, and that means they won’t be able to invest in our projects. So, part of what we’re asking Congress for is to make that tax credit refundable to developers themselves, instead of to tax equity partners, so that we can keep building. There is a causal effect because the economy is really struggling. It’s not that people don’t want to buy solar; it’s that the way in which solar is nanced, is imperiled.RP: The tax credits originally were, and maybe they still are, due to expire in 2021. If extending them is not part of the relief package, how is that going to impact the industry?AH: It will slow the growth of our industry. Solar will continue to lead the transition to a clean energy economy, but we could do it much more quickly, and bring jobs, investment, and clean air to our nation with more support of a tax policy. [For example], if the residential side goes away, and the commercial side goes down to ten percent, our compa-nies know and anticipate that [might happen] but, given that we have many in-tersecting crises in our nation at the mo-ment, certainly helping solve the private crisis and the economic crisis by having a policy supportive of solar would be a wise investment for our nation. RP: As we know, all energy elds, whether oil and gas or renewables, are male dominated. There are vari-ous initiatives but what can we do to make those industries more appeal-ing, not just to women, but also other minorities?AH: One of the most important things we can do is just recognize it as an issue. I run a business and I represent busi-Continued on next page...

Page 120

Oilwoman Magazine / September-October 2020 / OilwomanMagazine.com118OILWOMAN COLUMNnesses. Understand why it makes sound economic sense for us to invest in diversity efforts. Companies with diverse leadership teams make more money, they access more markets, they get more customers, so those are really important business reasons. Representation matters. Having women and people of color in leadership positions, on your boards, in your senior manage-ment, being the face of your company mat-ters. I think having the leadership, someone other than women and people of color, also talk about these issues [is necessary]. The white male leadership saying, “This is a really critical priority for us, and we’re going to invest in it,” is one really important way we could change things. It doesn’t just stop at the front door. It’s great to hire a diverse candidate, and have that person walk in on day one, but that’s just the beginning of the conversation. They need to feel included. It’s that cul-tural piece that is so critically important. As someone who runs a company, and someone who talks with people who run companies, I think a lot about the kind of cultures we’re creating in our workplaces. There needs to be intentionality around that. We have really been challenged in our own organization, as the nation is reeling from the most recent murders of our fellow citi-zens, of dealing with justice. We talk about diversity; we talk about inclusion. We’re also talking about racial justice, and how do we bring that into the work that we’re doing? I think that they’re all incredibly important. At SEIA, we created a board-level taskforce just [recently], to really dig deep, and gure out what we can we do. How do we get more women and more people of color into our organizations? What are the mentorship programs? What are the hiring practices? Where do we spend our money? How do we support black and women-owned businesses? How do we bring that into our policy? How do we make our own board more diverse? We’re rolling up our sleeves and getting really deep into action because that’s what it takes. It’s not going to work if we just have a diversity day one day a year, and then go back to business as usual. Abigail Ross Hopper was named the rst female director of the Bureau of Ocean Energy Management (BOEM) in 2015 and served in that capacity until 2017 when she became the rst woman president and CEO of the Solar Energy Industries Association (SEIA).Internally, there is an active diver-sity management program in the Department of the Interior (DOI) in which BOEM participates, but there is not a dedicated women’s network within the organization.“It might sound funny,” Connie Gillette, deputy public affairs of-cer and media relations manager, says, “but we don’t have a need. It’s the most equitable place I’ve worked.”Working in an organization that appreciates diversity doesn’t pre-vent Hopper from encountering gender bias outside of her own environment. “I see ways in which, as leader of this organization, I’m treated differently, perhaps, than leaders of some of my sister orga-nizations that are men. I still have to speak up and make sure that I’m heard. It’s not uncommon that I will express something in a meet-ing and then a man will say the same thing and he will be heard.”She cites another example. “I was somewhere; I can never remem-ber where” – a reection of the amount of travel her job entails – “and this man couldn’t believe that I actually headed BOEM.”“He said, ‘No, which department are you in?’“I said, ‘I’m head of it.’ “He said, ‘No, which section?’”While Hopper says she has not encountered blatant sexism in her current job or her previous job with the Maryland Energy Administration (MEA), she says it is the immediate assumptions people make that she nds more problematic. “There are just more subtle ways that women have to pay attention to and address or they continue.”“I pay attention to who people make eye contact with because you make eye contact with the person you want to inuence. There are many meetings where people from the outside will meet with my deputy director, who is a man, and me, and will look only at and ad-dress him. I have been asked many times when the director is coming to the meeting and I have to tell people, ‘She’s already here.’”Excerpted from Breaking the Gas Ceiling: Women in the Offshore Oil & Gas Industry (Modern History Press; May 2019) by Rebecca Ponton. Chapter 11Abigail Ross Hopper Director, Bureau of Ocean Energy Management

Page 121

119Think pink! In 1985, National Breast Cancer Awareness Month (BCAM) be-came an annual addition to the world-wide calendar, while in 1992, the pink ribbon ofcially came to be a ubiqui-tous symbol of breast cancer aware-ness. We’re all used to seeing those pink bows adorning product packages and signs every October.But not everything needs to be tied up with a pretty pink bow to represent awareness about breast cancer, which, as estimated by the Susan G. Komen Foundation, will total over 325,000 new cases in women in 2020 and over 3,100 in men. Many energy companies are thinking outside the bow to mark BCAM through a variety of programs, donations, partnerships and products. Focus on HopeKPMG International, a professional services and accounting rm head-quartered in Amstelveen, Netherlands, serves many energy companies, and this year is working in collaboration with the American Cancer Society (ACS), which is creating custom-de-signed face masks for KPMG employ-ees and their personal networks to pur-chase. The design themes will focus on hope, while raising awareness for breast cancer. For every mask purchased, a medical-grade personal protective mask will be donated to a cancer patient be-ing treated at an ACS Hope Lodge in the U.S. To inform people about the work the ACS does, support and promote healthy communities, and inspire oth-ers to get involved with the organiza-tion, KPMG is asking its ACS network, which includes employees who serve as board members, volunteers, fundrais-ers and advocates for ACS, to share their favorite healthy recipes. Once the recipes are compiled, KPMG’s internal designers will create a digital cookbook (as yet unnamed) that will be uploaded to a PDF link that can be shared within and outside the company. The e-cookbook will be free, but recipients will have the option of donating to the ACS. Here is one healthy (and delicious!) dessert recipe from the forthcoming e-cookbook: Peanut Butter Banana Shake • 1-2 tablespoons of peanut butter• 2 ripe bananas (cold or frozen is best)• 1 cup of unsweetened almond milk• 1 cup of ice• 1 tablespoon of natural sweetener, such as honey, agave nectar or maple syrup (optional)Combine all ingredients in a blender and mix until fully combined. Best served cold, this recipe yields about two 8-ounce servings. Raising Funds on the RunMany companies choose to participate in and sponsor The Susan G. Komen® Foundation’s Race for the Cure, the organization’s signature annual fund-raiser that includes a series of 5K runs and tness walks. One such company is Marathon Petroleum Corporation in Findlay, Ohio. It has been a primary sponsor at the $25,000 level in its home city for seven years. According to a spokesperson for Mara-thon, with an additional $90,000 its employees have donated to the cause over the past several years, the grand total raised for Race for the Cure is about $265,000. Because of the COVID-19 pandemic, most of the local races and walking events will have to be held virtually this year. [See sidebar for details.]Driving AwarenessRegional propane distribution company Dixie Gas & Oil in Verona, Virginia, shows what companies can do to support breast cancer awareness and prevention when they’re willing to get creative.Think pink . . . trucks.In January 2020, Dixie entered into a partnership with the Augusta Health Thinking Outside the Bow By Denise PorrettoOILWOMAN SPECIALContinued on next page...Chris Earhart, president of Dixie Gas & Oil, in Verona, Virginia, and Mary Mannix, president and CEO of Augusta Health Foundation.

Page 122

Oilwoman Magazine / September-October 2020 / OilwomanMagazine.com120OILWOMAN SPECIALFoundation, the charitable arm of the health system in Fishers-ville, Virginia, that secures phil-anthropic support to strengthen the system and meet the com-munity’s needs. As terms of the partnership, Dixie will donate a certain dollar amount annually, which will fund about 40 mam-mograms a year at Augusta for those without health insurance or those who cannot afford to pay. That means 40 people will get the much-needed screen-ing and a possible discovery of breast cancer that otherwise would have gone untreated. The cause of breast cancer is close to the heart of Chris Earhart, president of Dixie Gas & Oil. “Breast cancer took my mother when I was young and there are many families impacted by this disease,” he says. “We need to do all we can to support early diagnosis and treatment.”In addition to funding for mammograms, Dixie also has breast cancer awareness banners that hang in Dixie and Augusta’s locations. They are up year-round, not just in October, and are an indication of Dixie’s ongoing support.Dixie also tries to do a little something extra during BCAM to elevate customer awareness of breast cancer by including relevant information in the envelope along with the cus-tomer’s bill. Depending on the marketing budget, Dixie also may use other forms of media to heighten awareness. Now what about those pink trucks? There are three alto-gether – a propane bobtail, a crane truck that is used to set tanks in the ground, and a service truck. Dixie chose to paint three different trucks in a pink format to cover as much territory as possible and get more eyes on breast cancer awareness.“Dixie is committed to sup-porting the communities we serve, and we are excited about this ongoing partnership with the Augusta Health Founda-tion,” says Earhart. “Dixie has made signicant contribu-tions in the ght against breast cancer over the years and this partnership is a wonderful op-portunity to continue support for this important work.”Denise Por-retto is a free-lance writer in Princeton, New Jersey, who covers women’s and children’s health. Her byline has appeared in many national magazines, such as Parents and Redbook, and online for healthline.com. How Your Company Can Set the PaceThe Susan G. Komen® Race for the Cure and MORE THAN PINK Walk series of events are great ways for companies to make a difference in the ght against breast cancer. These events are important fundraisers for the breakthrough research Komen supports to nd cures for breast cancer and they create opportunities for patients and supporters to come together, wherever they are, and know that they’re not alone in their breast cancer journey. This year Komen’s fall races and walks have transitioned to virtual events so that participants can safely walk or run where they are and help raise those important dollars. How can the energy industry get involved and support the women and men affected by breast cancer? Become a sponsor: Supporting the event through local sponsorship is one way to increase brand recognition and show your community and employees your dedication to ending breast can-cer. Each event has various levels of sponsorship available for this year’s event or consider budget-ing this for 2021. Start a corporate team: Whether your company is back in the ofce or working from home, a corporate team is a way to support an employee going through breast cancer, show staff mem-bers the importance of taking care of themselves by being active, and building company morale overall. Offer to cover employees’ registration fees or offer a match or incentive for anyone who raises a certain dollar amount. Leadership is key, so working with your human resources (HR) department can result in even greater reach.Match gifts: Encourage employees to make a donation to Susan G. Komen® during National Breast Cancer Awareness Month and offer a match to that donation. This will show employ-ees your company is supporting a cause they feel is important. Visit the event website (ww5.komen.org/RaceForTheCure) to nd information on your local event and learn more about how you can get involved. American Cancer Society (ACS) custom-designed masks are part of its initiative with KPMG.